> It's basically the same idea as, "The monster stops being scary once you get a clear look at it".

This is pretty common in horror games, too. After a certain point, the monster loses its scare potency, and it runs the risk of outstaying its welcome. In the post-Amnesia wave of mechanically-minimalistic haunted houses, where you can only run and hide from the monster (if even that), the monster usually burns out its welcome pretty quickly, and instead becomes an annoying pest since you can't even awkwardly attempt to bash its brains in with a length of old pipe.

With that said, in more traditional horror games like Silent Hill and Resident Evil, monsters can retain a more existential fear factor beyond the immediate threat of violence and terror. After all, in those kinds of games you're usually relying on manual saves, so a monster killing you can potentially mean losing more progress than you would if you had an automatic checkpoint shortly before an encounter, thus setting up a sense of existential dread at the prospect of losing progress.

What's more, on top of that, you also tend to have limited ammo that allows you to dispatch monsters, and health items that let you make more mistakes. If you make them especially limited, it sets up a survivor's economy where you dread running out of the things that make life easier, so you have to decide if it's worth risking a hit by trying to slip past the monster, or if it's more worthwhile to expend precious ammo to remove the problem permanently.

You didn't really get that with a lot of Amnesia-imitators, where you could only run and hide from the monster, and your progress was saved frequently and automatically. The right kind of mechanical depth can add enough tension and dread to offset the monster losing its personal scare factor, since if they embody the existential threats of lost progress and resource scarcity on top of mere violence, they're still kinda scary because such threats are universal and intrinsic to the human condition.