Looking Grim adds a rare unsettling encounter when you're dangerously close to Death. At night, you may notice a distant dark figure watching you, staring directly at you, pointing
If you notice him too...
you may hear the bell toll.
This is a client side encounter that reacts to the players health.
When you are injured and outside at night, there is a chance from Grim to appear nearby. His distance changes depending on how close the player is to death: the lower your hearts, the closer he can appear.
Grim will only appear when the player has 3 or less hearts at night, then there is a 1/8 roll to trigger the encounter.
The amount of bell tolls you hear when noticing Grim correspond to how many hearts you have left with a maximum of 3 tolls for three hearts left down to 1 toll for one heart left.
Because Grim is an apparition rather than a conventional mob, you cannot fight him, kill him, or interact with him. He is simply there to remind you that you are nearing Death.