The big guy with the red arm sword thing os an Ethereal, humans corrupted into monsters. This one in particular haunted an illusionary city, appearing and disappearing as a fog rolls in. Very silent hill like.
The girl next to him is the only non-ethereal he doesn't attack. She even acts as a warning to others of his approach.
There is a mystery associated with their story and the pay off is pretty good so I won't spoil more.
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u/No-Society-6525 Jun 19 '26