Story within a story/ soft horror/ dystopia

This book is eerie, horrifying, yet gentle like a bed time story. There are aspects that reminded me of accounts of Jewish people in hiding during WWII, which might be triggering for some. I wish we got to know the main character's name.

CW: Dystopia, memory loss, body horror, death of a parental figure, drugs/ pills, illness, police state, muteness, abuse, captivity, implied rape, extramarital affair