Good entry!
I like the concept for the game a lot. It fits well with the given theme and there is a lot of potential directions you could take it in.
When it comes to visuals, the placeholder-ish feeling of the characters and environments leaves something to be desired, but the sanity drain effect makes up for it - it does a great job of conveying the game's idea to the player visually and acoustically.
I would have liked to see some more applications of the role system - for example, limit jumping to just the hero to push the players into interacting with the sanity system more. The platforms on the second level are a good idea - the player has more things in their arsenal when it comes to beating the level.
The sanity system in general is quite an interesting concept that I think has a lot of potential - if the game were to have a direct story, you could for example tie how the story plays out to the player's sanity usage, making them choose just how committed their actor is to the role and just how much of themselves they are willing to give up for it.
The audio, while simple, helped settle the mood for the game, which leads into my final comment - the atmosphere of the game is conveyed really well, with all the individual elements working together to create a cohesive feel to the game, which I think is quite commendable.
In general, you definitely stumbled onto a great concept with the game and I'd be excited to see a more fleshed out take on it, but even now the delivered game is quite enjoyable :>