IIRC the level at which herd immunity effects start kicking in is dependent on how contagious a given virus is. For an entire village to be infected in less than a month requires a very, very high R0 (one that's higher than has been reported so far), which would mean that herd immunity would likely kick in at >0.9.

I don't think an R0 that high is plausible, which suggests that only a fraction of the population has been infected in Nembro. That, unfortunately, suggests an even higher mortality rate, at least when the medical system is overloaded. The decline would then be due to the effectiveness of quarantine measures.