That's most of the entire point of Oddworld (and virtually all satirical fiction). It is exaggerated portraits of real incidents and figures (though in my case, Arrack and Domino are mostly spawned from my own desire to push boundaries and limits and my sense of humour).
Arrack essentially is a character I created first as a side story for Praetyre to tell, then tied him in to a similar character of Mitsur's, making them one and the same. He's evolved over time, maturing, dematuring, getting more and less ugly, but he's never been intedned to represent any sort of mutilated employee. He's just my experience in an ugly as sin psychotic Elton John character that you can also feel sorry for and laugh at his Zim-like ravings.
Domino is just my experiment in a LGBT character, my addition to what I think is an Intern-starved factory, and in his master my lame excuse.. err, opportunity to exercise my perverted neurons.
Of course it's horrifying. It should be horrifying. It should make you recoil, laugh, cry, and think. That's exactly what Lorne does, and that's what I do. Praetyre is just a semiregular Vykker who cleans up the messes of the interesting folks, the Lecter's and Vader's of the Oddworld. In Heaven, all the interesting people are missing, to quote Jacob's signature (although neither of my character's are truly evil in any way).
It's disturbing, because it's meant to be.
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