If I were to hazard a guess, they likely devolved during the Iran-Iraq War. That’s when they incorrectly determined that the primary contradiction facing the Iranian working class was seizing state power rather than fighting imperialism. This led them to ally with Saddam in the imposed war on Iran, siding them with imperialist interests over the interests of the Iranian people. They maintained most of their material support from Sadaam until he fell, and then the majority of theor support came from the West, primarily the US. Not to mention, after the death of their leader and subsequent passing on if authority to his Wie, they stopped describing their mission as explicitly socialist and instead began defining their project as a “democratic” movement.

I wrote about this a little before on a comment asking about them in the Ask Lemmygrad community, but it might be difficult to find.

In a lot of ways, the MEK fell to the fate that the Trotskyists did during the USSR. A once historically progressive force with respect to achieving revolution, warping into a counter revolutionary one after their incorrect analysis led them to divorce themselves to the peoples material interests, and from that point on, continuing to diverge and distort from that original role.