I really like the way you executed the scares. I expected failing situation 1 would have me suddenly jumpscared without warning, but it didn't. Instead you get a text box prompting you to realize what'll happen and not proceeding until you click through- it gave me a chance to ready myself while still being eerie and foreboding.
The twist was also very fun, although I have to say I was also a little disappointed to see the original gameplay loop set in situation 1 change. It was creative and fun, and I would gladly play a puzzle/horror game based on that sort of premise.