Cycles theory
After watching S4E5, my theory is that the monsters in FROM were never the ones promised immortality — the people were, and everyone arriving in town is a reincarnated version of someone who already lived there before.
The original townspeople were cruel to their kids, and the kids somehow made their fears/nightmares real. The monsters at night are just living nightmares created by the childrenand not the ones who were promised immortality. That’s why the town feels like a creepy fairy tale with monsters, talismans, spiders, faraway trees, etc.
An entity like the MIY tricked the adults by promising they would “live forever” if they sacrificed the children and also promised that sacrifice will stop the nightmares. But “living forever” actually meant endless reincarnation and repeating cycles.
And “save the children” probably means giving them a happy ending and breaking the nightmare cycle, not literally rescuing them.