The Evil Within was supposedly a horror game where you could approach situations however you want. I say "supposedly" because really, it usually just ended up with you either going full Rambo or running away from an invincible chainsaw man. But Bethesda is promising more freedom in The Evil Within 2, with multiple categories you can sink points into and improve so you can play your way.
Examples for upgrades include Health, Stealth, Combat, Recovery, and Athleticism, which will make you hardier, sneakier, deadlier, quicker to get back on your feet, and able to keep up your stamina for longer, respectively. As in the first game, you'll also be able to customize your weapons and craft traps so you don't have to rely on the same pistol the whole way through your adventure.
You have the technology. You can make Sebastian better. Stronger. Faster.