This def has the potential. My 5 cents on the game.
1. For a realistic approach shooting feels fine, not perfect. Weapon without iron sights or scope is unpredictable and you can't guess where are you shooting.
2. Movement feels good, crouch and prone is lacking if you go for realistic approach, I hope in future enemies will also try to sneak on you if they spot you earlier using prone, crouch and environment.
3. Tentacles too annoying, I guess that's an issue only because it's the only (not) actual enemy in the game, hope you'll add more diverse enemies and not spam them on literally every 3 sqm in a future.
4. Inventory is hardly user friendly and doesn't fit the game at all, I hope it's a placeholder. Imho in a game like this S.T.A.L.K.E.R., Dayz or Tarkov inventory system would look very good, especially if you add separate clothing slots like in Cyberpunk, allow to repair them individually and make them add inventory slots (pockets), where it makes sense, also an idea - indestructible backpacks which helps storing your items.
Also status menu or some sort of menu where you can see what is happening to your character and for how long would be nice.
5. Horror part feels great already, even though there are no enemies yet there are sounds that can make you expect someone hostile nearby, that's a plus indeed.
6. Adult gameplay needs more attention if you actually want to make this game 18+, yes you can simply spam animations on every enemy and add a gallery, nobody would complain besides me I guess. I hope you'll make more interactions between player and environment with enemies, there are so much ideas how to make cool events and put some animations here. Hoping for more updates, I'll have an eye on this project, unfortunetaly I don't have the money to support it for a moment. If it stays actively updated for some more time, then I'll be happy to support. Mostly I liked the demo.