As per Children's Novel about a group of children finding plates with owl patterns on them, and building paper versions, both of which disappear, I owned a hardback book as a child (somewhere in the later 1980s to the early 1990s) that had excerpts of various classic stories (Carnegie Medal award winners? At least two of the identified books are) that included Margaret Mahy's The Haunting and Alan Garner's The Owl Service. It was an oversized book, almost coffee-table width and height, and deeper, with color illustrations that make me think of watercolors. There was a story involving a factory that either did laundry, or made carpets, that was largely about how dangerous it was for the children working there, who often lost fingers or limbs to the machine. I think an early story had a boy finding a dying (or dead) man who'd been assaulted, and being afraid of the superstition that a dying man retained their last sight on the surface of their eyes.
Could this be The "Illustrated Treasury of Modern Literature for Children"? Published in 1985 by Exeter Books of NY. This eBay listing: https://www.ebay.com/itm/The-Illustrated-Treasury-of-Modern-Literature-for-Children-1985-Exeter-Books-NY-/264249234220 shows that the authors include Margaret Mahy, Alan Garner and Joan Aiken (to match DannyMcG's comment about Midnight is a Place), and shows a water colour looking painting for the Owl Service inside.