If you read through this
http://www.scp-wiki.net/dust-and-blood you get an overview with what's up with the scarlet king, but TLDR, Scarlet King was the runt of the litter of dark gods, and is also blind. It can can smell fear, but The Scarlet King does not know what fear feels like. This is capitalized on by spreading rumors to uninvolved SCP personnel, and creating enough of a show believe that there are terrible things happening to SCP-231-7. This is further perpetuated by memory wipes from those directly involved as they are rotated.
The Scarlet King does know that there is both fear (from SCP personnel), and an emotion (from being read a bedtime story) coming from her. Thus, the Scarlet King believes that she is feeling fear, and is sated.