Precursor Games has gone into some detail on Shadow of the Eternals' sanity system.
As in Eternal Darkness: Sanity's Requiem, the characters of Shadow of the Eternals are subject to a lot of stress as they pop back and forth through time experiencing the psychological horror adventure. Again, as in its spiritual precursor, players will see some very strange effects as their character's grip on happenings start to loosen.
By leveraging the sanity level modifiers of magic, combat and exploration, players may be able to reach otherwise inaccessible content. The video below chats about this and shows some examples from Sanity's Requiem.
The video is worth watching right to the end as it contains a joke, which I won't spoil.
Shadow of the Eternals is being Kickstarted for the second time following a bit of a rejig of its release plan.