“Owen” isn’t real. Isabel is working through a series of false memories planted by Mr Melancholy in the midnight realm while maintaining a psychic connection with Tara while they are buried alive after getting hopped up on luna juice.

Tara as “Maddy” starts snapping out of it first. She watches her real memories as a TV show called The Pink Opaque. It’s not a real show. The only time Isabel/“Owen” is able to watch it live is when with she is with Tara. Close to her in the midnight realm. Isabel never watches the show live alone. Tara’s power somehow causes the memories to be captured by a VHS tape (vhs is also the abbreviation for their high school) and those are able to be shared with Isabel by gifting the tapes in a darkroom.

Time is all stretched out so the seconds in the real world are perceived as decades. Isabel mostly rejects reality and Tara trying to help, so Mr Melancholy has an easier job with the false memories being implanted. But at one point “Owen” wants to watch the series on a streaming platform, and so Mr Melancholy twists the show to be something benign with a few references from the real memories to make it plausible for Isabel, who really buys into the lies, unlike Tara.

Other people have more metaphorical and representative reads on the film, this is more of an as presented in-universe reason the show is different. Jane the director said in an interview that it was a direct reference to having watched the Buffy musical episode and having that experience where it wasn’t as remembered.

But the question I am most interested in, and that really drove home the horror, was:
Would you be able to voluntary be buried alive, on the word of an old friend that you haven’t seen in almost a decade, on the off chance that all of this is actually happening?
Or at what point afterwards would you try it?

“I know it's scary. That's part of it.” is one line that sticks.

Jane said after watching Twin Peaks the Return they really wanted to make something with a similar feeling of watching a trapped character and desperation wanting to see them escape, and that definitely came through as I was yelling at the screen for Isabel to run away with Tara, then to get buried, then to try anything.

Some people see the ending as hopeful, finally having an egg crack moment.

I see Tara after putting her heart back in, having giving it her best shot to save her friend, knowing she doesn’t get another chance, beside a dug up Isabel, holding her body, begging her to wake up.

But there are many other great interpretations from people I’ve read.