Definitely the most important of early feature-length horror films I would say, but for sheer ancientness, my money is on this 1895 silent short by Thomas Edison: https://www.youtube.com/watch?v=RpNQJV8KblQ
Surely the first use of prosthetic limbs for horrorific effect!
Also maybe most did not understand how film worked. Most seeing the movie did not realize that an edit took place at the exact point that the blade was coming down, that the body replaced with a prop? How could even the basic understanding of motion photography be understood by the public in 1895. This putting of the piece of film in historic context, makes it seem that much more powerful. IMO
There was a time before the Internet and before DVDs when all you could do is read about lost films. One such movie was the 1967 prison talent show documentary "Titicut Follies".
Finally upon viewing you realize why the film caused such havoc. Again betting on morbid curiosity to garner box office revenue. The movie takes you to places that few see, and no one really understands.