Night in the Woods builds its small-town horror around an excavated mine shaft — a literal hole in the earth that Mae Borowski and her friends investigate. The game’s mystery involves disappearances, a tunnelling entity, and a cult. Most of this is visible in the main story.
What requires optional exploration: a series of conversations with the oldest residents of Possum Springs, specifically the group of elderly men who meet at the church. These conversations, assembled across multiple play sessions, describe the mine in terms that connect to a specific historical episode — a labour dispute in 1934 that ended with deaths that were officially classified as accidents.
The cult that appears in Night in the Woods’s horror arc is not a new development. It has been in Possum Springs since 1934, sustained by the people who managed the mine deaths and needed continued supernatural sanction for continued control. The town’s current economic decline is a consequence of the mine’s closure, which was itself a consequence of the 1934 events.
Infinite Fall built a decades-spanning local history into optional elder dialogue. The horror plot’s roots are in the town’s labour history, accessible to players who talked to old men in a church.

This is exactly why I love this game. So many layers if you take the time to look.
Stumbled across this on a late-night session. Your explanation finally made it click.