Shitty Carl

TTK Original | Beyond the Headlines

Spoiler Warning: This article contains major spoilers for The Endless (2017) and discusses its connection to Resolution (2012).

One man is trapped in a tent.

Every five seconds, his nightmare begins again.

Elsewhere, a man named Shitty Carl lives through a repeating cycle measured in minutes or hours.

In a nearby cabin, Mike and Chris endure a much longer sequence of events.

And at Camp Arcadia, an entire community experiences approximately ten years before its world resets.

All these people are prisoners of the same mysterious entity.

Yet their sentences are radically different.

Why do the time loops in The Endless have different lengths?

Why does one prisoner receive only five seconds while another gets ten years?

Are the durations random?

Does the entity assign each victim a punishment based on what they have done?

Or is there a hidden physical rule connecting the size of a prison to the amount of time inside it?

The answer is surprisingly concrete.

Writer-director Justin Benson explained an important rule in a 2018 interview: the larger the circular area defined by a loop’s boundary markers, the longer its cycle lasts.

That revelation changes how we understand the entire landscape of The Endless.

The forest is not simply filled with supernatural anomalies.

It is divided into prisons whose physical dimensions determine the duration of their prisoners’ lives.

But the rule raises an even more disturbing question.

If the entity can determine how much space a person occupies, can it also determine how much life that person is allowed to experience?

The Short Answer: How Do the Time Loops Work?

In The Endless, an ancient, unseen entity controls multiple localized time loops across the same geographical region.

Each loop has a boundary and a repeating duration.

When its cycle ends, the people trapped inside are killed or destroyed and the sequence begins again.

The prisoners retain enough awareness to understand their situation, making the repetition a conscious nightmare rather than a simple memory reset.

The loops vary in duration.

Camp Arcadia repeats approximately every ten years.

Mike and Chris experience a cycle lasting roughly a week.

Other prisoners endure much shorter periods.

The most extreme example is a man trapped in a tent whose nightmare resets approximately every five seconds.

The crucial rule is that the size of the loop’s territory is connected to its duration.

Justin Benson explained that larger circles formed by the boundary markers produce longer cycles, while smaller circles produce shorter ones.

However, the film does not establish a precise mathematical formula, nor does it fully explain why the entity creates the loops.

The mechanism is partially explained.

The purpose remains mysterious.

1. The Forest Is Divided Into Separate Time Prisons

At first, Camp Arcadia seems like an isolated community with unusual beliefs.

Justin and Aaron return to the camp years after leaving it as children.

The residents appear strangely unchanged.

They talk about an approaching event called the Ascension.

They seem to accept supernatural occurrences as part of ordinary life.

Gradually, the brothers discover that the surrounding wilderness contains several distinct time-loop territories.

Each is controlled by the same mysterious force.

But the territories do not all share the same clock.

A person in one area might repeat a few seconds.

Another person nearby might experience several hours.

Someone elsewhere might live through years before the reset.

This makes The Endless different from many conventional time-loop stories.

There is no single reset affecting everyone simultaneously.

Instead, the entity has divided the landscape into localized regions.

Each region contains its own repeating sequence.

The film’s supernatural world is not one enormous clock running backward. It is a collection of smaller clocks, each programmed to restart at a different moment.

This explains why the brothers can encounter people living under radically different temporal conditions within the same general area.

2. The Directors Revealed the Hidden Rule: Bigger Loops Last Longer

One of the most useful explanations comes directly from Justin Benson.

In an April 2018 interview with /Film, Benson discussed the strange formations and markers visible throughout the landscape.

These structures are not merely atmospheric decorations.

They indicate the boundaries between different time-loop territories.

Benson explained that the size of the circular area formed by those markers is related to the length of the cycle.

A larger circle produces a longer loop.

A smaller circle produces a shorter loop.

He specifically used the five-second tent as an example.

The boundary surrounding that tent is only about twenty feet across.

That extremely small territory helps explain its extraordinarily short duration.

This is a significant detail because the film itself does not stop to explain the relationship in a conventional exposition scene.

Viewers may notice the markers without understanding their purpose.

The director’s explanation reveals that the film’s geography contains a hidden temporal structure.

Space and time are directly linked in the design of the entity’s prisons.

The amount of territory available to a prisoner is connected to the amount of time that prisoner can experience before the next reset.

That does not mean the movie provides an exact equation.

It does not establish that doubling the radius doubles the duration.

Nor does it specify how every irregularly shaped territory should be measured.

But the general relationship is confirmed by the filmmaker.

And it provides the foundation for understanding the different loops.

3. The Five-Second Tent: The Cruelest Prison in the Movie

The most horrifying example appears when Aaron encounters a tent containing a man dressed in old-fashioned clothing.

The man is trapped in a cycle lasting only about five seconds.

He repeatedly experiences a violent reset.

There is barely enough time to speak, move, or react before the sequence begins again.

The scene is terrifying because it compresses the entire structure of the film into a few seconds.

Other prisoners have time to form relationships.

They can think about their circumstances.

They can attempt to resist.

They can make plans.

The man in the tent has almost none of those possibilities.

His life has been reduced to an endlessly repeated instant of terror.

The boundary markers surrounding the tent are closely spaced.

According to Benson’s explanation, that small enclosed area accounts for the extremely short cycle.

But the geometry is only part of the horror.

Consider what five seconds means for a conscious person.

There is no meaningful future.

There is no opportunity to recover from what happened.

There is no lasting progress.

Every moment of awareness is immediately consumed by the next reset.

The tent is not merely a prison that lasts forever. It is a prison in which the future has been almost completely removed.

This makes it one of the film’s most disturbing images.

The entity does not need to inflict a different torture each time.

The repetition itself is enough.

4. Shitty Carl’s Loop: Enough Time to Understand, Not Enough to Escape

Shitty Carl is one of the most important characters for understanding the rules.

He knows that the surrounding region contains multiple time prisons.

He understands that the entity watches its captives.

He has become angry, desperate, and psychologically exhausted.

His own cycle is much shorter than Camp Arcadia’s.

Accounts of its exact duration vary, but the essential point is that Carl repeatedly experiences a short interval before the reset.

Unlike the man in the tent, Carl has enough time to understand what is happening.

He can speak with Justin.

He can explain the existence of the loops.

He can provide information about the surrounding territories.

Yet that knowledge does not free him.

Carl’s condition exposes an important distinction.

Understanding the prison is not the same as escaping it.

He knows that the entity controls the area.

He knows that his existence repeats.

He understands that other people are trapped nearby.

But he remains unable to cross the boundary that defines his captivity.

His awareness becomes part of the punishment.

Carl has enough time to recognize the cruelty of his situation, but not enough freedom to change it.

That makes his loop psychologically different from the five-second tent.

The tent prisoner is denied almost every possibility of action.

Carl is allowed to act, but his actions never produce lasting freedom.

5. Mike and Chris: Why Their Loop Is Different

Mike and Chris are the central characters of Resolution (2012), the earlier film by Justin Benson and Aaron Moorhead.

They reappear in The Endless.

Their story takes place within another territory controlled by the same entity.

Their loop lasts roughly a week.

That gives them far more time than Carl or the man in the tent.

They can argue.

They can investigate.

They can attempt different solutions.

They can experience hope and disappointment.

But when the cycle ends, they are returned to the beginning.

Their situation reveals another form of imprisonment.

A longer loop does not necessarily mean a kinder punishment.

It can simply allow the prisoners to develop more elaborate hopes before those hopes are destroyed.

Mike and Chris have enough time to imagine that they might find a solution.

Their repeated attempts become part of the story the entity observes.

The connection to Resolution also demonstrates that the loops are not separate supernatural mysteries with unrelated causes.

The films share the same fictional universe and the same underlying antagonist.

But their individual loops remain distinct.

Camp Arcadia does not reset merely because Mike and Chris’s cycle ends.

The territories operate on their own schedules.

The entity controls not one repeated story, but a collection of stories with different lengths, characters, and endings.

That distinction is essential to understanding the film’s mythology.

6. Camp Arcadia: Why Does Its Loop Last Ten Years?

Camp Arcadia occupies a much larger territory than the tent or Carl’s immediate surroundings.

Its cycle lasts approximately ten years.

This gives its residents an unusual advantage.

They can build relationships.

They can develop skills.

They can create routines.

They can share meals, practice music, and maintain something resembling an ordinary community.

The residents know that the cycle will eventually end.

They call the approaching reset the Ascension.

Yet the long interval allows them to experience a substantial period of apparent normality before the next catastrophe.

Under Benson’s spatial explanation, the camp’s larger territory is consistent with its longer duration.

The camp is not simply receiving special treatment because its inhabitants worship the entity.

Its physical boundaries are part of the explanation.

However, the film does not establish who selected the camp’s exact size or why the entity assigned this particular group a decade-long cycle.

Those questions remain unanswered.

The important distinction is that the residents have enough time to build a culture around their imprisonment.

They develop beliefs that help them accept repetition.

They reinterpret destruction as spiritual transformation.

And they begin to regard their limited existence as a desirable alternative to the outside world.

A ten-year loop is long enough to resemble freedom, even when every possible future has already been taken away.

That may be the most disturbing feature of Camp Arcadia.

Its prison does not always feel like one.

7. The Four Major Loops Compared

The film’s principal examples reveal how different durations produce different forms of suffering.

Time-loop territory	Approximate duration	What makes it frightening
The tent	5 seconds	Almost no time to react or act
Shitty Carl’s territory	A short cycle	Awareness without meaningful escape
Mike and Chris’s cabin	Roughly one week	Repeated attempts to change the outcome
Camp Arcadia	About 10 years	An entire community normalizes captivity

These examples reveal a progression.

At one extreme, the prisoner has almost no time.

At the other, the prisoner has enough time to construct a meaningful-looking life.

But every territory shares the same fundamental limitation.

Its inhabitants cannot carry their future beyond the reset.

They may remember previous cycles.

They may learn from experience.

They may develop emotional attachments.

Yet the entity ultimately decides when their story ends and begins again.

The difference between five seconds and ten years is enormous to the prisoner, but almost meaningless to the power controlling the reset.

This is one of the film’s central expressions of cosmic horror.

Human beings experience time as the substance of their lives.

The entity treats time as something it can divide, shorten, and repeat.

8. What Are the Strange Rocks, Poles, and Monoliths?

Throughout the film, the brothers encounter unusual formations.

Some resemble wooden posts or staffs.

Others appear to be stone structures or objects shaped by people who once occupied the area.

At first, these details seem like ordinary elements of the landscape.

But Benson’s interview provides a crucial explanation.

The formations help define the boundaries of the different time-loop territories.

Crossing between them can mean entering another loop.

This transforms the geography of the film.

A path through the forest is not merely a path through physical space.

It can also be a passage between different systems of time.

Two locations separated by a short walk may contain radically different temporal experiences.

One person can live through years while another repeatedly experiences seconds.

The markers are therefore more than decorative symbols.

They indicate the limits of each prison.

However, not every unusual object has an identical function.

Benson also explained that some artifacts represent how different groups have interpreted the mysterious antagonist.

The film contains evidence of different communities creating their own representations of the same force.

This suggests that people have encountered the entity across different periods and cultures.

The landscape contains both the architecture of captivity and the history of humanity’s attempts to understand its captor.

That combination makes the setting especially unsettling.

The entity is ancient.

The prisoners are temporary.

But the prisons continue.

9. Can Someone Move the Markers to Change a Loop?

This is a natural question once we understand the relationship between space and time.

If a larger circle creates a longer cycle, could a prisoner move the boundary markers farther apart?

Could someone turn a five-second loop into a ten-year loop?

Could a trapped person destroy the markers and escape?

The film does not answer these questions.

The director’s explanation establishes a relationship between territory size and loop duration.

It does not establish that the markers function like ordinary mechanical controls.

We do not know whether they create the boundary or merely identify a boundary imposed by the entity.

We do not know whether the entity would allow them to be moved.

We do not know whether changing their positions would alter the underlying supernatural territory.

And we do not know whether the relationship between size and duration can be manipulated by human beings.

It would therefore be misleading to present marker relocation as a confirmed escape method.

The distinction is important.

Knowing how a prison is arranged does not necessarily mean possessing the power to redesign it.

The entity may control both the boundaries and the rules governing them.

The prisoners merely live inside the resulting structure.

10. What Happens When a Loop Resets?

The reset is not presented as a harmless rewind.

The prisoners experience violent endings.

The entity destroys or kills them before their cycle begins again.

The camp’s residents refer to their reset as the Ascension.

Elsewhere, the repetition is openly terrifying.

The man in the tent experiences almost continuous horror.

Carl endures repeated destruction.

Mike and Chris remain trapped in a cycle where their attempts to change the outcome repeatedly fail.

The precise form of death varies.

But the overall structure remains consistent.

The cycle reaches its end.

The entity intervenes.

The prisoners return to an earlier state.

And the story repeats.

One of the most unsettling aspects is that the prisoners are not simply unaware of what happened.

They retain awareness across repetitions.

That means the reset does not erase the psychological consequences of their captivity.

The body may return to an earlier state.

But the mind carries the burden of knowing that the same fate awaits.

The entity does not merely make people die repeatedly. It makes them live with the knowledge that death will not bring an end to their suffering.

That is what turns repetition into punishment.

11. Why Don’t All the Loops Reset at the Same Time?

The different territories operate independently.

The man in the tent can experience countless repetitions while Camp Arcadia continues through a relatively small part of its ten-year cycle.

Mike and Chris can reach the end of their week without triggering the camp’s reset.

Carl can experience multiple cycles while Justin moves through the surrounding forest.

This is possible because the entity’s power is localized.

Each territory has its own duration.

The film does not show a single universal reset that affects the entire region simultaneously.

Instead, the entity maintains multiple overlapping systems of captivity.

This is why the brothers’ exploration is so important.

By moving through the forest, they encounter different experiences of time within a shared geographical area.

The film uses their journey to reveal the structure gradually.

First, the audience notices that something is wrong at the camp.

Then the shorter loops expose the mechanism.

Finally, the approaching third moon reveals that Camp Arcadia is about to undergo its own reset.

The region operates less like one enormous time machine and more like a collection of separate cells, each governed by its own countdown.

That is the clearest way to understand the film’s supernatural geography.

12. What Does the Third Moon Actually Signal?

The appearance of multiple moons is one of the film’s most memorable supernatural images.

At Camp Arcadia, the approaching third moon signals the end of the current cycle.

The residents anticipate the Ascension.

Justin understands that they are approaching a deadly reset.

The moons therefore function as a countdown.

They indicate that the camp’s time is running out.

But the film does not establish that every loop must display the same lunar phenomenon in exactly the same way.

The shorter territories have their own repeated events and endings.

The third moon is especially important to the camp’s cycle.

It tells the brothers that their opportunity to escape is closing.

The supernatural sky also reinforces the entity’s control over the environment.

The ordinary laws of astronomy no longer provide a reliable framework for understanding what is happening.

Time and space are being manipulated by a force that operates beyond human comprehension.

The third moon is not simply a frightening image. It is a warning that the camp’s borrowed decade is almost over.

13. Why Can Justin and Aaron Cross Between Loops?

This is one of the most important distinctions in the film.

Justin and Aaron move through different territories.

They encounter Carl.

They discover Mike and Chris.

Aaron finds the man in the tent.

They eventually return to Camp Arcadia.

Yet they are not immediately trapped in every loop they enter.

This suggests that crossing a territory’s boundary is not necessarily enough to become a permanent prisoner.

The brothers are visitors.

The people they encounter have already become bound to their respective cycles.

The film strongly associates permanent captivity with the reset and death inside a loop.

That distinction helps explain why the brothers can still escape before Camp Arcadia’s Ascension.

However, the exact conditions under which someone becomes permanently trapped are not fully explained through dialogue.

The important point is that the film treats the brothers differently from the existing prisoners.

They still possess mobility.

They can cross between territories.

They can leave the region before the reset.

The trapped inhabitants cannot simply follow them.

The difference is not that Justin and Aaron have discovered a secret tunnel. It is that they have not yet lost the freedom the other prisoners no longer possess.

That freedom is temporary.

And the approaching reset threatens to take it away.

14. Why Does the Entity Give Some Prisoners More Time Than Others?

The spatial rule explains how the durations differ.

But it does not fully explain why the entity creates those differences.

Why does one person receive five seconds?

Why does Carl receive a short cycle?

Why do Mike and Chris receive roughly a week?

Why does Camp Arcadia receive ten years?

The film never reveals a moral system governing these assignments.

There is no confirmed evidence that more sinful people receive shorter loops.

There is no established hierarchy in which better behavior earns a longer cycle.

And the entity does not explain its choices.

One possibility is that it creates different loops because it enjoys observing different kinds of human behavior.

A five-second loop produces immediate panic.

A short loop produces frustration and desperation.

A week-long loop allows conflict and repeated attempts to change events.

A ten-year loop allows a community to develop rituals, relationships, and beliefs.

Each duration produces a different kind of story.

The entity’s fascination with recording and observing people supports this interpretation.

But its exact motives remain unconfirmed.

The loop durations may function less like sentences assigned by a judge and more like the running times of stories selected by an audience.

This is our interpretation of the film’s narrative structure, not a rule explicitly stated by the filmmakers.

Yet it helps explain why the entity’s power is so disturbing.

The prisoners experience their lives as reality.

The entity may experience them as entertainment.

15. The Hidden Horror: The Entity Controls the Length of a Human Story

Most horror villains threaten a person’s life.

The entity in The Endless controls something more fundamental.

It controls the amount of time a person is permitted to experience before their life begins again.

Consider the difference between the tent prisoner and Camp Arcadia.

The man in the tent cannot meaningfully develop a new future.

His experience is reduced to a repeated instant.

The camp residents have enough time to form relationships, master skills, and construct a community.

But neither group can move beyond its assigned limit.

One prison is immediately recognizable as torture.

The other can resemble a meaningful life.

This raises a difficult philosophical question.

Is a comfortable existence truly free if its boundaries cannot be changed?

The residents of Camp Arcadia may genuinely enjoy parts of their lives.

Their friendships may be sincere.

Their skills may be real.

Their happiness may not be entirely illusory.

But the entity determines the maximum length of their future.

It decides when their experiences will be destroyed and repeated.

The greatest power in The Endless is not the ability to kill. It is the ability to decide how much future another being is allowed to possess.

That is the central horror behind the different loop durations.

16. Why Camp Arcadia Is More Frightening Than the Five-Second Tent

The tent is the most immediately horrifying scene.

Its prison is brutally obvious.

Anyone witnessing it understands that something terrible is happening.

Camp Arcadia is different.

The residents appear calm.

They share meals.

They make art.

They practice music.

They maintain friendships.

They have developed a language that makes the reset seem meaningful.

Their long cycle allows them to normalize captivity.

That creates a more subtle kind of horror.

The five-second prisoner knows he is trapped.

The camp residents have built a worldview in which remaining trapped can seem desirable.

The difference is not simply psychological weakness.

Human beings adapt to circumstances.

They create meaning even under severe limitations.

That ability can help people survive.

But it can also make oppressive conditions easier to tolerate.

The film presents an extreme fictional example of that tension.

The shortest loop destroys the possibility of ordinary life. The longest loop makes captivity look enough like ordinary life that its prisoners may stop wanting to leave.

This is why the ten-year cycle matters so much.

It is long enough to hide the prison inside a community.

17. The Connection Between Time Loops and Human Institutions

The film’s spatial rule offers an interesting metaphor.

Different groups exist inside different boundaries.

Each boundary defines how much freedom is available.

The people inside adapt to the system.

Some resist.

Some accept.

Some construct explanations that justify the rules.

And some come to believe that the boundaries are natural or even sacred.

This resembles the way human institutions can shape people’s expectations.

A workplace, organization, community, or political system may define what kinds of choices are considered possible.

People can become accustomed to restrictions.

They may repeat familiar routines because alternatives seem frightening or unrealistic.

Of course, ordinary institutions are not supernatural prisons.

And the film should not be reduced to a simple political allegory.

But the structural similarity is worth examining.

The entity’s prisoners are not merely denied freedom of movement.

They are denied the possibility of imagining a future beyond the system’s rules.

The longer they remain, the more normal those rules may appear.

A system becomes especially powerful when it does not need to stop people from leaving because they have already stopped imagining departure.

That is the social meaning we can draw from Camp Arcadia’s long cycle.

18. Why Understanding the Rules Does Not Guarantee Escape

By the end of the film, Justin understands far more about the entity than he did when he arrived.

He knows that the region contains multiple loops.

He knows that the loops have boundaries.

He knows that their durations differ.

He understands that Camp Arcadia is approaching a reset.

And he recognizes that remaining could trap him and Aaron permanently.

Yet none of that knowledge gives him control over the entity.

He cannot destroy it.

He cannot free Carl.

He cannot rescue the man in the tent.

He cannot rewrite the rules governing Mike and Chris.

His knowledge provides only a limited opportunity.

He can identify the danger.

He can locate a possible escape route.

And he can leave before the reset.

This is an important distinction.

Many science-fiction stories reward the protagonist for discovering the system’s rules.

Once the rules are understood, the system can be defeated.

The Endless offers a more restrained conclusion.

Understanding the system does not mean mastering it.

Sometimes the best available choice is to refuse to become permanently dependent on it.

Justin’s achievement is not that he learns how to control the loops. It is that he learns enough to recognize when he must leave.

That is the practical significance of the film’s hidden rule.

19. The Directors’ Larger Theme: Repetition, Conformity, and the Fear of Change

The filmmakers have discussed The Endless as a story connected to conformity, nostalgia, and the difficulty of breaking destructive patterns.

That thematic framework helps explain why the loops differ.

Each territory represents a different form of repetition.

The tent represents repetition without meaningful choice.

Carl represents awareness without escape.

Mike and Chris represent a relationship trapped in recurring conflict.

Camp Arcadia represents a community that has built an entire culture around its inability to change.

Justin and Aaron represent the possibility of breaking a pattern before it becomes permanent.

Their story is not simply about discovering the mechanics of a supernatural phenomenon.

It is about recognizing the danger of remaining inside a structure that continually reproduces the same outcome.

The spatial rule makes that theme visible.

Every loop has a boundary.

Every prisoner has a limited future.

And every reset restores the conditions of the same story.

The entity’s prisons are physical expressions of a human fear: that life may become nothing more than repeating what we already know.

The brothers’ escape matters because they choose uncertainty over a guaranteed repetition.

Final Analysis: The Time Loops Are Different Because the Prisons Are Different Sizes

Why do the time loops in The Endless have different durations?

The most concrete answer comes from Justin Benson himself.

The mysterious boundary markers define different circular territories.

Larger territories correspond to longer loops.

Smaller territories correspond to shorter ones.

That explains why the man in the tent experiences approximately five seconds while Camp Arcadia experiences about ten years.

But the rule does not answer every question.

We still do not know exactly why the entity creates the prisons.

We do not know how it chooses their boundaries.

We do not know whether humans can alter those boundaries.

And we do not know why particular people receive particular durations.

Those uncertainties are part of the cosmic horror.

The film gives us enough information to understand the architecture of captivity without revealing the mind of the captor.

And that distinction is crucial.

The prisoners live inside systems they can observe but cannot control.

Some receive seconds.

Others receive years.

Some resist.

Others adapt.

But all are subject to the same fundamental power.

The entity decides when their stories end.

The Endless is terrifying not because time repeats, but because someone else has the power to decide how much time a human life is allowed to contain.

The man in the tent has five seconds.

Camp Arcadia has ten years.

Justin and Aaron still have something more valuable.

An uncertain future that has not yet been assigned an ending.

Frequently Asked Questions

Why are the time loops different lengths in The Endless?

Writer-director Justin Benson explained that loop duration is related to the size of the territory defined by its boundary markers. Larger areas produce longer cycles, while smaller areas produce shorter ones.

How long is the Camp Arcadia time loop?

Camp Arcadia experiences an approximately ten-year cycle before the entity destroys the inhabitants and resets the sequence.

Why does the man in the tent repeat every five seconds?

The tent occupies an extremely small loop territory, approximately twenty feet across according to Benson’s explanation. Its small boundary corresponds to its very short duration.

How long is Shitty Carl’s loop?

Carl experiences a relatively short cycle, far shorter than Camp Arcadia’s decade-long loop. Different descriptions give varying precise durations, but the important distinction is that he is repeatedly reset within a limited period.

How long is Mike and Chris’s loop?

Their cycle lasts roughly a week. Their story is also explored in Resolution (2012), which shares the same supernatural universe.

What are the strange poles and rock formations?

They help define the boundaries between different loop territories. Some other unusual structures represent how different communities have interpreted the mysterious entity.

Can the loop boundaries be moved?

The film does not establish whether the markers can be moved to change a loop’s size or duration. The relationship between boundary size and cycle length does not prove that humans can manipulate it.

Why can Justin and Aaron enter different loops?

They are not yet permanent prisoners of the entity’s repeating territories. They can move between areas and escape before the approaching reset.

What happens when the third moon appears?

It signals that Camp Arcadia’s current cycle is nearing its end. The entity will destroy the residents and begin the next repetition.

Is the entity punishing people for their sins?

The film does not establish a moral system that determines who receives which loop. The entity’s fascination with observing human stories suggests possible motives, but its exact purpose remains unexplained.

Sources and Further Reading

The Endless (2017), written by Justin Benson and directed by Justin Benson and Aaron Moorhead — primary film.
Resolution (2012), directed by Justin Benson and Aaron Moorhead — companion film.
Justin Benson and Aaron Moorhead on Toxic Nostalgia and Time Loops — /Film Interview
Justin Benson and Aaron Moorhead on The Endless — BFI Sight and Sound
How Was the Duration of the Loop Decided in The Endless? — Movies & TV Stack Exchange
The Endless (2017) Explained — Astronomy Trek

How Do the Time Loops Work in The Endless (2017)? The Hidden Rule Behind Every Reset