Think about how a "Monkey’s Paw" curse usually works. If the original townspeople sacrificed their kids for immortality, they got split into two distinct, horrific punishments:

1. The Soulless Husks (The Monsters)

The physical bodies of the original parents stayed in Fromville. They got their "eternal life," but it was stripped of all humanity, warmth, and blood. They became the nocturnal creatures trapped in the tunnels wearing those mid-century archetypes (the nurse, the milkman, the cheerleader) like frozen costumes of the lives they betrayed. They are empty, immortal predators.

2. The Reincarnated Souls (The Arrivals)

What if the souls of those original sacrificers didn't stay inside the monsters? What if their souls were cast out, forced to reincarnate in the real world, completely wiped of their memories, only to be relentlessly pulled back to the town as arrivals?

If that is true, the current residents aren't running from strangers. They are running from the immortal, monstrous physical shells of themselves from a past life.

- explains why the monsters know everyone’s name and personal secrets instantly—they are literally looking at their own reincarnated souls.

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-It turns the entire show into an endless cycle of self-punishment: the monsters are eternally torturing and tearing apart their own reborn souls as penance for what they did to the children.

The Exceptions to the Rule: Jade and Tabitha

We know Jade and Tabitha have been confirmed as reincarnations of an original couple from the sacrifice era but with a massive catch. They were the parents who tried to stop it. They sang to the children, gave them the "hope" that created the faraway trees, and failed to save them.

Because they tried to do the right thing, they aren't trapped as hollow monsters. Instead, they are stuck in a different kind of loop: they keep getting reborn, drawn back to the town, and forced to try and solve the puzzle to finally free the children’s souls ("Anghkooey") before the town's paranoia traps and kills them all over again.

If the rest of the arrivals are the reincarnations of the guilty townspeople, then the Entity is basically running a meat-grinder of cosmic justice.