In what ways does transformation play a role in stories meant to scare us?

You'll have to be somewhat more specific with regards to what form of transformation you refer to. Shaper shifter, red riding hood and the wolf, multiple personality disorders, serial killer etc... The one common thread in this context is that appearances are always deceiving so it is always wise to be on your guard in any given situation because absolute safety is an illusion

Irrationality and disorienting dilemma are some of the ways transformation play a role in stories to scare us.

Explanation:

Horror fiction is stems and grows from the engagement of the readers with the text. The basic tools that this genre uses is the description of the physical setting and consumes the reasoning to deliver fretful aesthetics that triggers emotions and fright among the readers.

Transformation could be successful if the readers grapple with disorient themselves from the assumed knowledge and realign themselves with the new information.  

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                          - jayden