The Melody of Oblivion - Season 1 Episode 3 White Night Cape

After going on their journey, Bokka and Sayako arrive in a town called "Bakuyagou", or "White Night Cape", where it's always dark, and morning never rises, making it a perfect place for tourist attractions. It also seems like whenever the mysterious lighthouse shines red, no child appears on the streets, for they fear that their children would be killed by something. Bocca came to ask a knowledgeable lady about Melos Warriors. Bocca also found himself saving a young girl, Kew, from a robot creature, who was conveniently a little sister of the owner of an inn, who allowed them to stay for the night, as a debt. The two travelers knew there was something wrong with the city, since the residents didn't seem like they wanted to be saved or anything, even though there was something as dangerous as the robot creature. What lies in store for them? What is wrong with White Night Cape?