I used to think that I could somehow solve the mysteries of "Undertale" and the Underground. that was foolish, of course. Undertale is a work of fiction by an artist who was new to creating fiction, and the most likely explanation for any incongruities or baffling details in Undertale is creative inconsistency. Did Fox or anyone else working on Undertale actually have a coherent ideas about the nature of magic and SOULs in their fictional world? Did they know, or even care, what the "War of Humans and Monsters" was really about, or what the Delta Rune really meant, or how the CORE works, or how huge stands of trees can survive deep underground? It's unlikely. It was sufficient to hint at these things, and unnecessary to explain them.
But I dare to suggest that at least some of the inconsistencies in Undertale are, in a sense, load-bearing; I suggest that Fox wants us to think about them. There are awkward holes and loose ends in the weave of Undertale's storytelling fabric that seem like they're meant to be there, designed to make the player uncomfortable. "Don't you have anything better to do?" is the crowning example, but there's many others, including the entire character of Undyne.
How did she lose her eye?
It's not just that. Undertale is a game that leans heavily upon a sort of fairy-tale presumption about its characters: they may be "monsters", but they are friendly and sweet and reasonable, and only want to hurt humans because they've hit the limits of their endurance of exile and suffering. As a book in the Snowdin library reminds us:
“Love, hope, compassion…This is what people say monster SOULs are made of. But the absolute nature of “SOUL” is unknown. After all, humans have proven their SOULs don’t need these things to exist.”
It's so easy, so tempting, to take that at face value—we sure did! And I daresay a majority of Undertale fandom was right there with us, prepared to believe that the Monsters were unequivocally good and deserving of happiness, and cruel destructive humanity was the villain of the narrative. Most of Monsters we meet in the Undertale pacifist story seem like they want only to live out their lives in peace; only a few of them seem to have unusual passions or desires, and that's usually because of something pertaining to humanity.
So...how did Undyne lose her eye? Who did that to her?
I've encountered fanfic that depicts Undyne as getting wounded in a fight with an invading human, but this makes little sense: when Undyne meets Frisk, she talks as though she's never actually seen a human being before, and only knows them because of Dr. Alphys's media collection. That doesn't necessarily rule out the idea of Undyne encountering a human being before Frisk; maybe there was a RESET afterward. But that still doesn't explain what happened to her eye. I am reminded of how Asuka Langley seems to acquire an eye injury across multiple timelines.
Anyway there's another hint: in the pacifist dialogue, Undyne is described as beating people up. Monster Kid's excited to relate how Undyne beats up "bad guys". Where are they? There's some hints about juvenile delinquency among the Monsters; is Undyne going round clobbering teenagers? Another Monster in Snowdin says "[Undyne is] rude, loud, and beats up everybody who gets in her way." Oh, is that so? That sounds less like going after "bad guys" and more like being a plain ordinary bully. Even Undyne herself admits that she was a "hotheaded kid" and even picked a fight with King Fluffybuns. It's not suggestive of a happy life, if Undyne felt from a early age like she always had something to prove.
Such questions are likely to get no canonical answers. Fox's attention is now on "Deltarune", and while Officer Undyne is clearly derived from Undertale's Undyne and perhaps a commentary on her, she's not the same person. (For one thing, she's got both her eyes.) But the inconsistency between the "Monsters are made of love and compassion" faery-tale vibes, and the spectre of violence and conflict that seems always to have swirled about Undyne even from her childhood, can't be a mere accident of slipshod creation, not in a game that's so intimately concerned with violence.
~Chara of Pnictogen