Don't eat the cupcakes, but on the plus side there's a pool. Maybe it's a brochure to go with the welcome letter, make it seem more like a vacation than a weird little experiment cage.
Margo thinks it's faeries too. She called it fairy bullshit but you know, same thing. I don't know if she'd know any better than anyone else how to get rid of people's problems because she just got here, but she knew pretty fast about what it might be.