Just finished Act 2. I really loved everything about this.
First I wanted to start off with the bugs I have encountered, which was the bug at the name menu when not entering it with the keyboard (I used a controller) and the bug in the hunting tower, but as I can see now in the comments, I still had the older version that did not have the fixes for that. Also interesting that there's more info on hatred/love now, I was wondering about those values during my playthrough (but saving all the bunnies kept the love train going, I made it through lovingly). Also funnily enough I always assumed the infinite ladders were a feature not a bug.
The story is the biggest draw for me, it immediately hooks you with the mystery of the black-haired woman, and then seamlessly transitions into telling the story of the Sweich family drama. Beat-for-beat there's memorable scenes playing out, I think the first one that really made me go "whoa" was the border war scene, that was wild. And yeah, it kept moving forward ever-stronger after that, you wrote that it's going to get even crazier from act 3 forward, but I also already enjoyed the jump from act 1, which, while sad, was relatively normal-esque to act 2, where things got more weird and curious. Like dang, when that king of hatred card got introduced with just the right foreshadowing making you go "... Wait, 'Arthur'?", that was so great, how he was introduced in the story after that. Love it. Looking forward to act 3 and what you'll have in there next demo.
Art-wise, it all looks very stylish. I think the character sprites for the family work well, like you immediately get a good read on their base personalities, while they retain their family features (eyes and eyebrows predominantly) that show they're related. The effects, color distortion, VCR effects, those all look amazing. A huge fan of the cutscenes too, I loved how the ones up until Act 2 came back in the cave below the lake. The monster designs are another strong point, between the more ethereal monsters that attack the psyche and the more, well, literal meat-grindy monsters that get more physical, I am a huge fan of their design. Boss monsters were sick (the good sick), like damn, they also had that emotional impact aside from their stellar art, they were both as story beats, and gameplay the climax points. I think there was also a good flow in the demo, only time I got somewhat seriously stuck was with the Sarah Rebellion fight, which I THINK had something going on that she only attacks you with the multi-shot when you strike her? She sometimes did it anyway, so I'm not 100% sure if that's really the case, but letting her burn herself with the sword of Damocles did it for me, so I will not question if my wishful thinking willed magic RNG into existence. Was a tense fight either way, again, also due to the emotional impact at the time.
Music was another high point, when I saw that "Music by horbror" at the end I thought, you're absolutely right to make that its dedicated extra credit, those are some of the catchiest tunes I've heard in any demo day game ever. That "Eat the flesh, drink the blood" verse from the fleshrites fight music has been living rent free in my mind for the past month (I've been playing Dreams of Joy Departed on and off over the past month, this is also why I'm still on the old version). All the vocal tracks are high points really, that thematic song that plays during the heart of ice scene, the smells like teen spirit remix that plays during the deer hunting teaching segment with teenage Sarah, those are burned into my brain, which really is a testament to how great and catchy they are. Cool of you to put them on Soundcloud too, thank you for that! Update after writing the rest: I've been listening to fleshrites on loop while writing this, it seems like the "eat the flesh, drink the blood" is not leaving my brain anytime soon. Again, just a great catchy tune.
I also want to point out just how funny your game is. It has some heavy themes, and I love how you offset them by adding some jokes in there, contrasting the heaviness, and I think also adding to the heavy themes through them, since you have that contrast. Like I think if you overdo it with them, you'd destroy the mood, but you manage to get it just right here, where it forms a contrast to the heavier stuff without making the whole thing absurd. Kudos for that. Most of the humour is of course through Billy's absolutely non-compromising specialness, but also Winter's deadpan attitude and just the descriptions of the world around. Like the America map was one of my favorites. The state "Jefferson", perfect. Only one better was of course the greatest himself, Joergen (hallowed like the mother be His name).
Final point I want to touch on is what I think this game does best, which is setting the mood, I touched on this before, but there is always an otherworldly feel to things, like things are similar to how they should be, but not quite right, which is great because it really keeps you on your toes when following the story. This is where story art and music come together to create something really unique and this is where the greatest strength of the game comes from, like you really feel that there is a vision to the game you're trying to make and you have the music, writing and art skills to make them a reality as a cohesive unit. Those are always the greatest games in my opinion.