Oh, ok I got the bad ending on my first playthrough. Just to clarify if you plan on fixing it the scene played out but when control went back to harry he couldn't move...
Viewing post in Silent Hill 1 Demake - GBC version comments
I have made a patch on this page, you can check it out.
But if the bug still occurs, you can load the previous save, press Select button at the start of the cutscene (that's how I do when debugging) to skip it (you can skip most of the cutscenes in this game with Select). After that you get the Good Ending.