Wraithmarsh from Fable II is one of the blatantly creepy areas of the game, filled with all kinds of demons and ghosts and gravestones, but it also contains some very subtle horror. About halfway through, you have to pass through a little abandoned house which contains two closed iron maidens with a treasure chest by each. One treasure chest holds a teddy bear, and the other holds a wedding ring. Think about it.
One mission you get has you helping a man find his son in a dark cave that's filled with Hobbes. You arrive at a door, and he hears his son on the other side, but you can't get through the door. He tries to break through the door, while you go around. When you arrive, he's broken open the door, and found that his son has been turned into a hobbe. A hobbe that you might've just killed on reflex. He dies. This is mentioned on the loading screen, stating that a theory as to Hobbes is that they were children who were turned into Hobbes. And you kill them by the dozens.
At the beginning of the game, a criminal agent makes a young girl an offer. Despite being cold, hungry and homeless, and having a younger sibling to look after, the girl says that she will never be desperate enough to accept. The game doesn't state outright what the offer is, but given the available facts, there's a fair chance that it's squicky.
Lucien's Spire is rather filled with it, unfortunately.
The player is given several options for getting to the Spire: they can either A) give up all their swords, guns, and gear, then board a ship full of recruits for the guard, or B) I lied. There is no option except A. Theresa never offers to use her limitless teleportation ability to whisk you there, nor can you even opt to stow away on the ship and get to keep your gear. Or hell, even just taking your own boat out. On a similar note, all of Lucien's guards are Crucible Champions, which translates to 'certified badass celebrity.' It's also common knowledge that nobody who enters the Spire has returned. So why are these highly-employable badasses signing up by the hundred to go to the island-of-no-return?
During one of several 'be evil or lose XP' moments, the player is called upon by one of their fellow guards to monitor a group of prisoners who are being left in cells to starve to death. The choice? Pull a lever and give them food, netting you a rather large XP loss, or sit there for an unreasonably long period of time and get piles of evil points. The problem? Those prisoners are being left there to starve to death. The guards aren't just going to let them go after tomorrow (when they're expected to die). The 'good' option is just prolonging their suffering.
Lucien's master plan: enslave large numbers of workers, feed them little, then work them to death. Also hire large numbers of guards, feed them well, and force them to wear shock-collars that can be triggered if they defy your will. What? The benefits of being a guard is apparently enough for super-employable badasses to travel to an island no one has ever returned from and then stay there working for you, so why do they need electric obedience collars? Feeding the slaves well and outfitting them with the collars (which Lucien seems to have no shortage of) would probably get the construction done a lot faster. And there's no shortage of food. After all, there are levers dedicated to releasing trapdoors laden with the stuff.
When first arriving at the Spire, the player is not twenty feet away from Lucien, who is giving some fancy speech about his plans. Now, during the endgame, Lucien dies to a single bullet or spell. While the player has been disarmed, they still have access to a wide range of spells. Inexplicably, the player is forced to sit back quietly on their nuclear arsenal of magical warheads while the man who murdered your sister and tried to kill you rambles about his latest evil scheme.
And after breaking Garth out of his prison, you kill the single most powerful man on the Spire (the Commandant) along with dozens of guards...and then leave. Never once does Garth, the genius wizard, think that killing Lucien while they're effortlessly wreaking havoc through his doom fortress would be a good idea.