Gonna have to disagree with all of this, haha. 2 definitely keeps a creepy atmosphere, from the desolate abandoned streets of raccoon city to the abandoned police station that has zombie hands popping out of boarded up windows while creepy ass music plays. It certainly has more action than 1, and you could argue its less creepy overall, but it still has very much the same designe philosophy. RE3 as well. They have the same level progression, slower pace, emphasis on puzzles/exploration, and resource management. The only difference between 1 and 2/3 is that 2&3 throw more enemies at you and give more ammo to compensate.
the way i see it is more along the lines of linear vs. one large area exploration progression path which RE1 has more of vs. RE2/3. like basically in RE1 most of your time is spent in the manor and extensions of the manor (outside, lab underneath) and progression is very back-and-forth between areas which is where a lot of tension is built due to both familiar areas still being potentially dangerous and unfamiliar areas having the unknown. the 'sole survivor' angle and sole environment where you build familiarity lets the designers start fucking with the player with strong sound design (this is a HUGE strength of RE1, for real)
RE2 and 3 are more linear in the sense that you usually don't go through areas enough to gain that familiarity because you're usually just going to grab an item and then backtracking to get to the next new area (or just going straight to the next area). RE3 has more of it (from what i recall? you backtrack through that mid city section i think 3? times) but the 'chaotic city' setting and additional survivors that are waiting for you during the backtracking sections makes it lack that really scary atmosphere RE1 has. plus the more action oriented gameplay mechanics and whatnot
i'm not saying that 2/3 abandon the horror aspect entirely- no RE has done that, not even RE6 believe it or not! it's more than the nature of more action alongside the setting the game takes place in that makes it less scary. the scariest part of RE2 being the police station is basically the same reason as RE1 where it's a lone survivor setting where you backtrack and build familiarity with the area while also not knowing what to expect every time you go.
the pure mechanical designs of 'puzzles' + item collection via exploration still exist because that's what the core gameplay direction is but the broad progression and level design meshes more with RE4's linear progression/exploration for 'puzzles' (though obviously more limited) than RE1's back and forth is what i mean
in regards to why it's less scary ultimately for the tl;dr:
effectively the difference in the 'horror' aspect between the two games and how they're designed is like... RE1 is 'creeping horror' at it's center while RE2 and beyond are more 'exhilarating horror'. those aren't mutually exclusive and all the games have both but the difference in tone really shows between RE1 and RE3 if you play them one after another. creeping horror is inherently more scary because it's not designed to excite/thrill.
