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Kafkaesqueness doesn't require magical realism. It's about a sense of being powerless in the overwhelming and opaque machinations of a larger system, usually a bureaucracy.

I find that it brings a lot of context into view when I remind people Kafka read his stories to crowds with a dry sense of humor. Consider The Burrow - there’s certainly something funny about trying so hard to perfect your bunker that you end up not using it.

Magical realism. The edges of any "genre" is going to be very fuzzy.

Yeah maybe more specifically https://en.wikipedia.org/wiki/Fantastique and some of the examples are not explicitly supernatural.

I didn't get any sense of magical realism from this story. It seemed to delve a lot into the internal thoughts and reflections of someone dealing with the absurdity of the outside world, so Kafkaesque seems the best description.