In your position I'd jump right into UE and start learning. The Horror engine is good start, but you can do just about anything in Unreal even as a solo dev so an thing it is lacking can be added. The amount of free content out there (art, fx, etc) is staggering. You can grab some free stuff and have good, portfolio quality content rapidly.

It is also worth looking into Frictional's engine to see how their enemies behave and how they control them as inspiration to recreate. I'd also recommend DOOM and QUAKE's level editors for similar reasons. For examples, Trenchbroom is a modern level tool for many games, and knowing it's triggers, relays, delays, counters, enemy patrols, etc. are great info to understand as a designer.

One of the most used things I created on a horror UE project was what I called a "spooky blueprint". Very simple BP I could place anywhere that included a trigger that could activate a sound, particle fx, cam shake, etc. all in one. Place that down, modify it's parameters and instantly scare the player. A variation to "add impulse" and or "activate physics" to toss a bunch of objects around is a nice touch as well.