When I first heard about haunted Din, I thought it was like where he was the eldritch being, so here are some ideas:
Din is not human
He and his family is an eldritch being that can disguise themselves because they are hunted throughout the galaxy due to their eldritchy-ness
The separatists come to the village he lives I because they heard about his family
When his mom and dad die, they tell him to hide his true nature so he can survive
When the mandalorians pick him up, they don't know about it at all, I guess
Like maybe they suspect it but don't question him on it
So, like season 1 and 2 happen, Grogu still gets taken by the dark troopers
*Queue sequence of getting help for cruiser*
When Din and the crew get on the cruiser, and the dark troopers are coming, Din goes full eldritch and destroys them all before Luke gets there
He melts out of his armor into a shadow beast with octopus like arms and has the most bone-chilling scream
Everyone just stares, jaws on the floor
Like, holy shit, this dude is full, shadow-y eldritch creature that just destroyed all these dark troopers
Then it turns to Grogu and the creature becomes the most softest being in the galaxy
So basically, they protect and hide Din's true heritage (even Bo-Katan!)
I had this stuck in my head for a while, and had to talk about it. Din, as said, is kind of like a mix between shadow monster and a kraken that's intangible?? IDK, anyone want to expand on this because I have zero time to do so