The final shot of Season 1 is a ruined Crystal Cove, overgrown and abandoned, with a sign that reads: "They never found the bodies."
Enter Scooby-Doo Mystery Incorporated Season 1 —a show that took the beloved franchise and injected it with long-form serialized horror, tragic romance, Lovecraftian cosmic dread, and a mystery so deep it wouldn't be solved for 52 episodes.
– A turning point. The gang faces a real gnome that isn't a costume. Shaggy and Scooby are truly terrified. This episode explicitly questions whether the supernatural exists.
The real villain isn't a man in a costume. By the end of Season 1, we learn that the town is built upon a "Hellant" (a hellish prison) containing a malevolent entity known as —a cosmic demon who feeds on fear and paranoia.
The Entity, in a final act of vengeance, collapses the cavern. The entire Mystery Inc. team is buried alive. We see them screaming as rocks fall. Then... black screen. Credits roll.