The dangling corpses and cages full of bones suggest this area is about more than just the local populace going hollow. Morticians made a living burying corpses, and wore simple worker's clothes for the dissection and burial of undead, though the ceremonial significance of such work is long forgotten. Charcoal Pine Resin was used in the Undead Settlement to preserve Undead bodies after dissection.
There is no shortage of brash thieves in Lothric, and the ones imprisoned on the High Wall likely scaled the wall from the Undead Settlement. They are only willing to practice their thievery on the Wall though, for they fear the castle, which is rumored to devour men.
The evangelists sent from the cathedral were teachers, all women, who came to enlighten inhabitants of the Undead Settlement and sent carriers on the path of sacrifice.