(Sidenote: There is a lot of brilliant stuff in The Path, that I wished had gotten more attention, perhaps time for blog post on it
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Thanks! Looking forward to that! :-)
Failure in The Path is not just a specific way of dealing with the problem of failure in games. To a large extent, failure, or what can be perceived as failure in the narrative (but probably isn't in its meaning) is at the very core of our interpretation of Little Red Ridinghood. It is an attempt to "emancipate" failure, to embrace is as part of life.
That being said, I do think that the idea of switching the tone of the narrative before the threat becomes transparent is a good technique. Surely even in horror stories there is room for a moment of relief, a moment away from threats, to then engage with them with renewed suspension of disbelief.