"The only thing SH related game fans cared about after SH3 was PT"
4 has its flaws and is definitely the weakest of the original quad but it's still held in high regard because it's an actual SH game. And though I haven't played it (or any post-4 SH game) myself I've seen plenty of people praise I believe Shattered Memories (I can never remember exactly which one but I'm pretty sure it's SM).
I used to think 4 was pretty good but frankly the last time I played it it just bored me, if I hadn't by that point finally unlocked Eileen's sexy nurse outfit I doubt I'd have been able to finish it and I don't really plan on ever playing it again, at least it's not likely.
So while I would say 4 is definitely worth playing at least once, I think I just wore the game out.
And Shattered Memories is the one you're thinking of, the thing about Shattered Memories is that it's not really
that great of a game, the gameplay and puzzles are very simplistic, it's close to a walking simulator half the time and the parts where you're running from monsters aren't that great either, but the game is so many leagues beyond every other western developed Silent Hill game that it's very easy to forgive the game's faults, it was a really a miracle that we got one last game with Silent Hill in the title that was decent.
What the game succeeds at is being well written, no, it's not as well written as 2 and 3, but there's something there, it manages to tell a pretty interesting tale and create a spooky, wintertime atmosphere, helped a lot by Yamaoka's final soundtrack for the series.
Plus the gimmick of the changes to the game depending on your choices is a lot of fun.
Climax was getting better, they proved with Shattered Memories that they were the only western dev who in any way "got" Silent Hill, it's absurd to me that they weren't allowed to continue the series and instead it was given to the nobodies who made Downpour.
Honestly, after all these years I really like to just think of Silent Hill as a trilogy, ending it with 3, Shattered Memories aside of course, which is safely enough it's own continuity and thing, because I feel that 3 really brings the story line to a satisfying conclusion, I can't help but interpret the UFO ending where Silent Hill is
destroyed as a subliminal message conveying Team Silent's true intentions, especially given the rumor that 4 started off as a brand new thing.