If you fail to scare the monster Piglet becomes scared in his face and body language. He's hunched over, looks scared, i think the music also changed when hes scared. He honestly acts like how Oswald in FNAF'S *Into the Pit* reacts.to being chased or when hes nervous. So when Piglet is scared, it makes the game a bit foreboding.
If piglet was running around scared the whole time I'd defently find it more creepy esspecially due to the occasional silent room.. But I can see why people see it as a silent hill thing. It did only gave me chills when Piglet was scared. Which the person who played on here, barely got him in that state. It makes me wonder if i could find a playthrough where hes always scared. Since in this one he barely was. That would be interesting since the whole feel seems to change.
I probably would be way more scared of it as a kid though. That castle level I'd never play on my own.
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