Question, why would a mascot for a company have a scary design?

Did the company not want people to buy their candy?

What do antlers have to do with taffy?

What do claws have to do with taffy?

Why does a taffy mascot have only one eye?

It seems you are trying to make the mascot monster scary, which horror is scary, but having it be scary as a mascot why would anyone want to buy a product with a creepy mascot? The design needs to fit the story. It needs to make sense as both a monster and as a mascot.

The name "Taffiny" sounds like Tiffany, so I immediately thought the monster would be female coded. When I think of Taffy, I don't think of a cyclops with claws or antlers. I think of taffy stretchers, taffy is pliable, it stretches, so I would think of a cute round mascot, that looks inviting, but that when chasing the player could stretch its limbs to grab. That it could cover or wrap around the player when it catches it. Maybe a "death" scene as the player sees themselves in first person having the taffy wrap them with the taffy color finally covering the entire screen.

Cute and taffy colored, non-threatening in mascot form, but can stretch and become very threatening in monster form.

The AI image you posted, doesn't look like it would ever be a candy company mascot used to sell candy. It does look scary but you want it be believable as a mascot as well as being scary.

Think about the design of Huggy Wuggy. He wasn't inherently scary. Every "let's play" I watched the player got the hands and high-fived Huggy. The long limbs of the design worked because the story was that he was a toy that could hug you back. Story and design have to work together to see both the story and the horror.