The two distortions theory
The Little Nightmares world has been twisted, we already know that. But I think that there were actually 2 separate distortions : a physical one and a mental one. Here is why :
So this world was normal before…well we don’t know if it was our normal, but it was their normal. Then, a first distortion happened (though I don’t know from where it came from), which distorted them physically. We know that thanks to some portraits, like for example the Viewers' portrait…they weren’t addicted to TVs like they are now, or they wouldn’t have made these portraits, too focused on watching TVs. Their brain wasn’t rotten by it back then.
This distortion probably went on for a while, with all the portraits and all…I also know that people's faces weren’t distorted back then, because of the masks made by the Doctor. Some people asked for masks to hide their distorted face and look "normal" again. We can see that with the Janitor (aka Roger) as he's wearing a mask that looks like skin : we can see a reproduction of his mask in the Hospital, and the mask falling around his hat in his portrait.
So this shows that while they were physically twisted, people still were mentally fine. Then the second distortion happened, which made everyone lose their mind. People that were disgusted by their face didn’t get a mask from the Doctor anymore, but they got turned into the Patients ; Viewers became solely addicted to the TVs, and so on…this distortion made them true monsters…
And that’s my theory in the big lines ! I have a lot of other things to say about the two distortions, but I'll do them in separate posts because I don’t want this to be too long ! Of course, this is only a theory !