A Parade of Horribles (Dungeon Crawler Carl, #8) by Matt Dinniman

As chaos and mass panic spread outside the dungeon in the wake of Faction Wars, Carl and Donut find themselves on the tenth floor, where they’re forced to compete in a surprisingly normal set of tasks. Races. Get from point A to point B, and don’t come in last. It all seems a a little too simple.

Ignore those whispers about what’s happening on the mysterious eleventh floor, something the system AI calls A Parade of Horribles. Nobody, not even the showrunners, knows what that means. Just that the AI has ominously dubbed it “a coming-out party for the ages.”

So Carl is planning a party of his own.
But if it goes wrong, it’s not just the end of Carl and Donut. No. The stakes are higher than they’ve ever been.