Spoilers below (idk how to do the cut off thing) but...
...In Parker's route, Walter mentions having a brother that he's not close with, so my guess is they're twins and the brother is Herbert. It's not a perfect theory, since there's still so much information missing about Walter's past, but it's what makes the most sense to me so far
I'm operating under the assumption that it's amnesia as a result of a traumatic childhood event tbh. Some of the flash backs in... I think it was Lars' route seem to imply that something happened to Walter and Herbert when they were younger that Walter blames himself for, though it's probably gonna be a while before we get concrete details about what exactly went down