The v2 worked fine. And the game was quite interesting! Here are some pros and some cons;
You did a great job setting the atmosphere. The sounds were good and the design looked nice, even though the floor plan of the house... well, it was a dream anyways. But still, how you set the atmosphere in this game, superb.
The scares? Well, they were a hit and miss. There were some scares that didn't quite work and some just were too much. Triggering a hud of the lobotomy on the screen seemed very cheap and didn't help the atmosphere. I think the scares with the furniture falling over was actually really nicely done, and there were some other quite nice scares. The banging on the door and the growling? That was some really tense stuff! Really well done, really kept me on the edge of my seat. But then on the jump scares? Yeah, they didn't work many times. I think this game could have used more subtlety, as it felt the kind of game that would benefit from that. Shapes walking across the halls? That's great, but I think they would have worked better in this game without the scare sound. Maybe that's just me, but the way you built the atmosphere really felt like it could have used more subtle scares. A few of those really tense scares, like the dog (I assume it was a dog) banging on the door. Also, maybe a bit less scares at times, so that it keeps the player expecting for a scare, but it never comes. And then after some time, when the payoff actually comes: BOOM! The player didn't suspect it.
Also, another thing that kinda bothered was the film grain shader or hud (or both). It made it look like the boy was holding a camera, which would seem odd. Other thing that seemed odd: When you finish the game, there's a text on the winning screen. That doesn't seem like something a kid would say or think(unless it was an adult dreaming he/she was a child). Also, I would have liked some chase maybe at the end when you find the last teddy. Some last really heart-pounding and pulse rising chase would have been good in my opinion. It seems weird, as I just said this game could use some more subtle scares, but the subtle scares would go throughout the game. The final scare would be big.
Hope this helps! I overall liked the game really much and thought that it's a nice idea. Maybe it could be expanded beyond the "find the x amount of y's" formula. But still, it's a really cool and at times quite a scary experience! I think you improved vastly from your Shutter project.
BTW, Shutter. Does it happen to be inspired by the Thai horror film also called Shutter?

Both have something to do with cameras, although different kinds of cameras.