The atmosphere is very good in this game. The tricks with the masks got me, and I shot them right away. I audibly shouted at the first jump scare, that's how tense it was. The first encounter was very tense as well, and had me checking corners the whole time. I also liked the touch of having the water on the floor so you could listen for enemy footsteps. However, I did kind of lose that tense feeling when I died at the encounter with the three enemies.
I would've liked a more subtle increase in difficulty, to ease me into the harder encounter, but I understand this is more of a proof of concept, so the pacing needs to be pretty quick. Once I understood I needed to blow their masks off, the encounter was much more manageable, though it was frustrating to be defeated in one hit considering the difficulty spike. In the full game, I think it would be interesting add scavenging mechanics, as well as some simple resource management in health and ammo pickups. I think there is an excellent framework for a full game here, given some more enemy types made (perhaps only certain enemies interfere with the light, instead of every enemy? Some enemies hide in those closets littered around the map?).
And of course, that ending is wonderfully funny. I'd pay cash for a full game.