Lost Library is a place where Sunny's memories were stored. At some point, presumably when it became an entrance to Black Space, it sunk deep beneath the world. The memories remain, but they're starting to erode a little. The names are blanked out. It feels like part of Sunny's coping over Mari's death is resulting in him repressing everything. The good memories hurt because he can't stand thinking about what he ruined, which might be why he scribbled out the Photo Album. And the painful memories obviously hurt. Even a precious memory like this one ended up a forgotten book in a forgotten library deep beneath his subconscious.
And then after beating the three manifestations of his biggest fears; not by overcoming them, but instead engaging with them like they were any other enemy of his dreams, the books are all scribbled out. Every single book. Maybe it extends beyond just books here and Sunny really doesn't remember these memories anymore. The achievement you get from beating the three fears being called Repressed isn't exactly a good indicator either. Sunny's very clearly at his absolute limits and would probably kill himself sooner rather than later at his point, but maybe there's a point where he'd truly forget his entire childhood. Headspace would become what he remembers. Could the pain still reach him if he loses all context to why it hurts? Maybe he'd be able to move on this way despite the cost. The implications are horrifying to dwell on.
I think that'll be it for the night. I've still got a few achievements to do. Some more dreaded than others. Oh boy...