First off, loved the chapter 1 experience, I didn't explore further because I want to wait until it's done but it was an incredibly unsettling game in the best possible way, the lazy river was my favorite part.
Some initial thoughts: I think the intro area with the car and parking lot could honestly be cut entirely, the quality of assets doesn't feel up to par with the rest of it for example very weird UV and AO bake issues with the generator. I find it breaks immersion especially since it's supposed to be a real life area and not an indoor liminal space like the rest of the game. I bet it could be done as a very brief cutscene that immediately drops you into the pool or something.
The shadow man implementation worked really well in some areas, when you see him in the bottom of the pool for a split second that was really creepy but I think it needs to be stripped back even more in other areas if you are planning to keep this in the game. I think it works best when you see it for a couple frames and are genuinely unsure if you just saw something, most of the times when I saw him for more than a quarter second it immediately diffused the tension like in the mall area near the end of chapter 1. However, the anticipation of seeing something really kept me on edge especially in areas that stretch off into shadow. The shower area I thought was pulled off really well, with the amount of darkness and confusing layout, the "keep moving" on the mirror terrified me and added a ton of tension, especially as I heard noises behind me. The reveal genuinely did freak me out in this area.
I also think the music could be cut in the mall and pool and just have various static ambient noises with your echoing footsteps but that's personal preference.
Excited to see where it goes!