King Jellyjam is a thinly veiled Satanic Archetype. The dude even lives underground.
If King Jellyjam's hypnotism transfers to his hypnotized subjects, he could use this to continually divert attention away from the camp. This would explain why Wendy and Elliot's parents (and probably others) stop searching the camp just because the councillors tell them their kids aren't there.
In The Horror At Camp Jellyjam, King Jellyjam uses slaves to wash him 24/7 to prevent him from suffocating on his own stench, and if one of them stops, he eats them. But no one can work around the clock without food or water or any rest, so working for him is a death sentence.
Take a look at the cover after reading the story. Buddy is hypnotized into helping murder children. Judging by how forced his smile seems, the poor bastard is probably screaming for help on the inside.
It's not uncommon for psychic entities in fiction to act and speak through those they control. That could be Jellyjam himself grinning at us, staring through the face of one of his victims.
Even after the evil is slain by Wendy, the damage is still done. Several parents will never see their children again because their bodies have been digested in the belly of a monster. And the councillors? Their involvement in the children's deaths will mark them for life. Claims of being brainwashed by a giant mutant slug are unlikely to hold up, and even so they have the blood of countless children on their hands. Buddy giving Elliot a winning coin was probably the only possible way he could atone for the crimes he committed under Jellyjam's control.
