In 1999, I commuted into the Santa Cruz mountains daily, and would often head home after twilight. So the road home (windy, 2-lane, and heavily wooded) was always kind of creepy anyway. So there’s item 1, lots of time spent in a wooded setting at night.
When I’d heard about the movie (pretty early on, before it was even screening anywhere), I spent a goodly amount of time going through its website. For the time, it was really well done and original, and scared the pants off of me the same way a good horror novel should. Add to this, I was going through a lot of personal turmoil at the time, and wasn’t incredibly emotionally stable.
Check off item 2, stimulating the imagination beforehand.
My brother and I went to go see an early screening at a local art house theater, in th e middle of the day (in summer). The theater was filled with adults, and there was not a lot of murmuring or other distractions. The preshow slides were a series of very moody b&w ‘ghost town’ style photos, along with a soundtrack that sounded like having one’s ears underwater in the bathtub while someone knocks on it. Super spooky.
So we all watched the film in silence. At the movie’s end, everyone filed out quietly, there wasn’t really any discussion - I can’t speak for everyone who was there, but the group seemed sort of spooked.
As I emerged from the theater door, I look up and notice - someone’s hung a couple dozen of those stick figures from the lobby ceiling! HOLY CRAP. My brother and I flew out of there and into the sunlight, shivering on an 80-degree day.
I have never had issues with watching shaky-cam type films, so that aspect just added to the tension for me instead of being a distraction.
For the next couple weeks or so, the drive back home from work was extra, extra creepy. Especially when I’d pass the mailbox that was made out of rough stones.
So anyway, I agree with you completely - one could be conditioned to be receptive to Blair Witch to have made it a frightening experience.