Even though Id probably go to jail, Id just burn the forest down.
Once I realized people are dieing and Im in a time loop and going in circles, Id just burn the woods down to mark where Ive been and havent. Or Id just burn the woods down to spite the WITCH.
Yeah Id probably be charged with killing my friends, and arson, but at least Id be alive.
Also, I agree you cant show the BLAIR WITCH, whatever it would be would be anti climatic.
I think a better twist is it was just a serial killer, and when you see the guy in the corner in the original, they could explain he had a gun pointed at him and the killer told him to stand in the corner.
They could've done this, but the only problem would be explaining the time loop stuff.