We've seen time and again that if something seems too good to be true, particularly in the Fallout universe, it probably is. This holds just as true even in the latest Fallout entry thanks to one entirely out-of-place burg. Covenant.
The suspiciously sleepy little village holds a number of useful amenities: a spare bed to sleep in, a doctor to reduce those pesky rads, and a shop where all manner of garbage not fit for scrapping can be bartered. It's also home to some quite serious home security (e.g. automated defense turrets), and its very own Voight-Kampff Test to keep out "undesirables."
Said dissidents are "synths," artificial life forms that have nearly everyone in Fallout 4's Commonwealth on edge. So much so that Covenant is revealed to actually be secret slaughterhouse designed to root out these indistinctly threatening doppelgangers at the cost of a pretty stiff percentage of false positives.
If you are a synth, or one of the unlucky 80-ish percent of humans that get caught by the test you'll be interrogated, tortured, and dissected at Covenant's sister site, the Compound. If not, you, uh, get some lemonade made by a robot.
What's really frightening about the Compound/Covenant isn't the whole sterilized mass murder thing -- though that would be bad enough. It's that the hamlet's residents have let their fear justify witch hunts, murder, and the belief that killing something they perceive as different is measurably distinct from killing each other. They also charge way too much for stimpacks, adding highway robbery to their crimes.
The one bright spot in all this is that even before the player comes along it's clear that the project is unsustainable. Cracking the right terminals reveals messages that explain what it costs to run this fancy charnel house (i.e. more fusion cores than it'd take to power a whole fleet of power armor). It's nice to consider that in the world of fantasy evil actually loses money.