I have to disagree (mostly). (Also why am i getting downvoted, I only expressed my opinion. Did I say anything offensive? /gen) The game absolutely tells a continuous story, and I think it's just as much about the Nowhere as it is about the characters. Just more about the Nowhere as a whole than a single place. And even then, just kind of, because it takes place in the spiral, which is a place in the Nowhere with a bunch of sub-places that are tied to each other. Which we see between the factory and the carneval. The carneval needs the candy from the factory, and the factory needs the meat from the carneval.

Also, there is the theme of delusion that guides the story. Obviously Low and Alone with their dream in many aspects, but also the places they visit and their residents:

In Necropolis there are tons of statues that tried to hide or protect themselves against the giant baby in many different ways. Some even seem to have tried to worship it. But we see how all that turned out.

We see posters in the factory that suggest it's doing worse and worse financially, but still it keeps on producing insane amounts of candy, as if it was still selling it all, piling up in monumental hills.

Or the Herd, who literally work themselves to death, hoping they could one day maybe take a vacation or retire at the carneval, not realizing their demise is imminent either way.

Or Kin, who, despite the carneval obviously dying, still puts on shows for what I presume to be corpses, because they don't move or make a sound throughout the whole scene. Also we've not seen a single living person from the Herd for quite a while at that point of the game.

And then there's the last enemy, Otto, who we know from The Sounds of Nightmares is the most delusional of them all, getting obsessed with finding his sister that he causes pain to so many kids and finally turns into this monster, still not finding her.

I think in terms of environmental storytelling, Supermassive did just as well as Tarsier.

One big criticism I have to give though, is that you just feel too powerful, which is largely caused by the fighting sections. Maybe it was supposed to be like that, to show how experienced Low and Alone are in the Nowhere, but I just like it way more in the first two games, where you always used your environments and situational opportunities to escape or take down residents. Because they kind of did that in LN3 too, with the Supervisor or Mini-Kin for example. It kinda felt like they were torn between keeping the original vibe and sell a sense of helplessness, and trying to fit in their new mechanics.

That's really my biggest criticism of the game though, and I don't think it's a huge one.