Creature

The Creature is a humanoid pink thing that haunts the house of Family 00437. It wears the bedsheets of Subject 4's bed.

Speculation
Many people have speculated that the Creature to be Subject 7. However, this has not confirmed yet.

From the ABSurveillanceSolutions website, when you log in and ask for Video 3, you can see The Creature approaching Subject 1 and Subject 2.

☀http://absurveillancesolutions.com/l/x3.mp4

There is also a widely popular theory that the Creature is the physical manifestation of Lynks Disease, and a related but less widespread theory that it's the physical manifestation of Anne's paranoia about contracting Lynks disease.