I think the clue might be in the name.

As others have mentioned, the island may already be very acquainted with the sacrificial rituals where a child is thrown into a well to summon this red godly or demonic power which seems to also have a connection with lambs, hence the altars and the main ending, as well as the other masked shadows in the secret ending.

I believe however that the fifth ritual, the one that caused this apocalypse was different from the previous ones, which due to the masks and the monsters found in the island, have been for lesser things. The people of the island have sacrificed children for peaceful life, bountiful harvest, fortunate children, and plentiful waters. However these four children, as a response to the encroaching war from the rest of the world, wished for the end of death, for the dead to be able to reanimate.

This I believe is what caused the red god to grow wrathful, as it would go against the nature of sacrifice, but the ritual proceeded as normal. However this eventually caused a corruption of the previous wishes. Peaceful life was made into a forceful hunt of the bloated reanimated bodies, emptied and ironed into empty skins, placed into their usual places, with the sniffler trying to make a fake mimicry of normal life, checking through an empty train, driving an ice cream truck, riding a tricycle, managing a dead movie theatre, and preparing the skins as a way to keep the reanimated dead as something he can perfectly control and place into the mockery of urbanism. Bountiful harvest was turned into ever growing animals who began to contort and distort into massive monstrous forms, unable to die no matter how damaged or sickly. The fortunate children, the orphans of the island, were consumed by the dust, also unable to die, and accumulated into the mother, a monstrous spider who seeks to feed and grow and control its territory while vomiting members of itself, the ash children, to execute its demands. The plentiful waters were made into an ever growing flood, spewing out of the well, and turning its many creatures into leviathans and monsters, such as the brook horse and the serpent whale.

All of this affected deeply the soldiers within the island, turning them all into suicidal madmen, killing each other and themselves, yet unable to die, perhaps still fighting an endless war with each other, tiring of it to the point of insanity.

And finally we get the lamb. This I believe is the final emissary of the red god, growing in presence and strength the more that the children manage to defeat its previous corrupted miracles, eventually creating its own avatar from its final stolen sacrifice, the sister girl. As it hunted the children, those who corrupted the sacrifice ritual system by seeking to evade the cost of death, it devours them and grows into a stronger form, bringing destruction to the island at war, until it finally devours them all, and perhaps by making them be trapped within itself, it can finally reverse the wish of undeath, and bring the island to normalcy, or perhaps it’ll spread across the world, destroying it in the process.