Later in the game, when the spider only has one leg left, you are forced to rip it off (you can see the muscles and everything) and roll what's left of the spider into a pit of spikes so you can progress.
You want to know what's worse? The spider's leg TWITCHES on the ground after it's detached.
The entire game, really, in no small part due to the gloomy, oppressive atmosphere. Throw in dead bodies all over the place, the silence of the entire game, and everything either actively trying to kill you or easily capable of doing so by accident, and the whole experience is pretty unnerving. Some of the level layout seems specifically designed to induce this; a mid-game factory section features a vine in the foreground that looks distinctively like a spider leg, for example.
The game also compels you, the player, to do several disturbing things in order to continue, such as waiting for a parasite-afflicted kid to stumble into a lake and drown so that you can use his body as a stepping stone, or the eventual fate of the Giant Spider: it drags itself toward you with its last remaining leg, and you have to rip off the leg and roll the limbless body of the still-alive spider into a pit as a makeshift bridge. Witnessing such deeds would be bad enough, but having to perform them yourself is extra creepy.
One of the artwork for the special edition of the game has the boy being lifted off the ground by the spider after having just been stabbed through the neck. It's just as horrifying as it sounds.
The other children, whether it be the ones trying to kill you or their corpses, bring a lot of terror and Fridge Horror to the game. There is just something ominous about their mere presence, especially when you enter the part of the forest that is essentially a child's makeshift hideout filled with contraptions, traps, and the many dead bodies of other kids.
One of the easter eggs requires you to walk into a dark cave and continue walking through pitch black, while cave critters chirp, in order to reach it.