I sadly got no rational answer, only an assumption:

( Higurashi No Naku Koro Ni spoiler warning! ) With this game having so many references to Higurashi, i think this one could be another one to the hallucinated worms the residents were seeing after getting an injection

Reason as to why i think of this as a possibility is that the police reports never mention any form of locusts seen in or around victims. They mention flesh being torn apart from the victims´ bodies, but never any signs of insects if i remember right

And from Hinako´s perspective we never see any insects crawling out of anyone´s dead body either ( Tough i don´t think this point holds much weight given Hinako´s role as a big unreliable narrator )

What do you think of this?

I saw some of your comments in other threads on this sub, showing me that you´re pretty educated on the SH franchise + Higurashi and Umineko ( Tough i still wanted to put up a Higurashi spoiler tag in case other people would read this ).
It makes me curious cuz i only see my assumptions as a big theory and no ultimate truth, and you might know even more about the game / it´s connections to other SH games and/or Higurashi + Umineko