This is based on opinion. Please don't list it on a work's trope example list.
Nightmare Fuel / AdventureQuest Worlds
The whole Living Dungeon event has this with the Tree Titan fighting a red serpentine dragon, it does not hold back on the nightmarish aspect of the quest. It does not help that the dragon wants to eatThe Hero in question! It eventually ends up with The Hero controlling the Tree Titan via journeying into its Brain with a Manual Control.
The Fear Chaser event generally has this as its theme, especially for the Terrorkind monsters. If you thought the big baby doll head and several zombie baby doll heads in the area where you fight the Fear Feeder were creepy enough, just wait until you fight the big boss of the event: A gigantic, winged, skeletal entity simply called FEAR itself that not only has spiders crawling all over his body but also cries tears of lava! EEK!
Fear is more of a Nightmare Retardant. The thing that would be most fearful is the intro cutscene in The DoomWood Saga where chaos tentacles are going out of control on King Alteon's chaorupted body and slowly chaorupting him in a more terrifying looking way.
The Pie of Rising Evil from the 2011 Mogloween event couldn't have been more aptly named. That thing is creepy. Especially its voice, which has a hypnotic quality on those who hear it, and which uses their fears against them when that doesn't work in order to lure them to the shop so that it can eat them. The especially creepy scene was with Farmer Northrup of Willow Creek and his poor kid, who knows something is going on, but can't convince his father not to listen to the evil voice...
We know it's supposed to be rather dramatic, but come on! We all know Desoloth is a Magnificent Bastard, and that's why he frightens AQW players. Oh, but his magnificence isn't the only thing that frightens us. He nearly kills Galanoth, too, which is also more than enough to scare players even though it's considered very dramatic and is not actually supposed to be meant to do that. Galanoth leaps at Desoloth in an attempt to kill him, Warlic lets out a Big "NO!", and BAM! Just like that, Desoloth ACTUALLY bites off Galanoth's GODDAMN ARM! And in the next cutscene, the hero receives an Oh, Crap! reaction to seeing Galanoth having lost his arm (despite not actually getting an actual Oh, Crap! face). So there you have it, Desoloth NEARLY KILLS Galanoth by biting off his arm.
As if nearly killing Galanoth by biting off his arm wasn't enough, a short while after his death by the hero's hands, Drakath releases his skeletal remains from the Cor Draconis and Chaorrupts him into the Chaos-empowered Desolich. Oh, snap.
The Chaos Children and the worst of all is Stalkwalker trying to feed on the children's parents and trying to eat the children when they become adults as well as repeating the whole thing over and over again.
The Flood of Chaos event has a plague of Chaorruption sweeping Swordhaven, with its sewers a bright purple with Chaotic taint. The artists did a very good job in making Chaos utterly nightmarish, including incredibly freaky-looking Chaos Spiders and Rats. And to make matters worse, King Alteon, our wise and noble King of Good, has finally fallen to the ongoing case of Chaorruption that has been plaguing him all game since the Chaos Incident.
The Princess Anglers in the doom vault dungeon look seriously creepy, and if you go wrong at the start you briefly see one early, as it lunges out and presumably eats you!
In the Tower of Doom, when you reach the 50th floor of the top half of the tower, you enter the "brain room", where Zoshi comically pokes at all the neurons with his sword. Soon enough, a strange arm emerges from the "brain" and your character reacts. Then the rest of a body that belongs to a nasty monster called Creel actually emerges from the "brain", and we have both Zoshi and your character appropriately reacting to its appearance in horror. In fact, Creel itself is pretty disturbing in terms of appearance.
And the tougher section beneath the tower leads into a huge digestive tract, ending with a fight against Slugbutter, which is even more hideously disturbing than Creel. In this case there is a degree of Nightmare Retardant in Zoshi insisting on calling it Fredderick, and some other slapstick comedy. Even so, appearance wise the tower as a whole is one of the creepiest releases in the game.
The 13th Friday the 13th event is perhaps one of the most gornographic events in an otherwise lighthearted MMORPG. There's a blood moon in the background, and not to mention the skull statue in the center of Battleon, along with the statue of King Alteon, both cry Tears of Blood. And then there's the 13 Lords of Doom, and they resemble some of the most infamous characters in Artix Entertainment history, both in name and in appearance, ranging from Sepulchure himself to Vordred to even Maximilian Lionfang (who was also a Chaos Lord, of course).
If the appearance of the Ruins of Elfhame isn't enough to creep you out, once you enter its mouth, you discover to your horror what General Nevanna does to her own former partner Aven.
Kolyaban's transformation of Aria in the Darkblood war.