Nope, some consider it psychological horror, it obviously has some suspense because of the slow exploration, maybe that's where your paranoia comes from.
I dare to say it's neither, I don't even understand why people associate it with scary things at all. There are like a very few areas that are legit "unnerving" (at most), the rest are just weird or silly or even (very few) happy.
Because it's fashion, it's trendy to say you like a horror game.
I know. I've seen this before as well but it really isn't horror at all.
It's as much a horror as LCD Dream Emulator. Which obviously also is not a horror.
In the same way that sensory isolation chambers are sometimes the most unnerving experiences that people have, I think the game is more of an interactive rorschach test for ourselves.
Not that it was necessarily intended that way, but maybe moreso that many people drawn to it conceptually can empathize at a deep level with the creator and his abstract way of expressing things. How would you describe imageboards to somebody - a place where everyone is no-one, on purpose?