I think there are a couple of issues here.
1) There are a couple of different ways that people use 'capsuleer dementia'. You mention both of them: The first is as an explanation for people saying OOC things. The second is usually referring, in my experience, not being mentally ill in general, but the tendency capsuleers have for being apparently violent psychopaths or sociopaths - there is a set of similar symptoms usually displayed. Those two things can overlap. (lol, I owned ur fleet etc).
2) RPing mental illness. This can, sometimes - even often - overlap the above also: if you are playing the IC aspect of capsuleer dementia. I think, though, that it mental illness IC is fairly common within the RP community, and is often done in a way where Evil=Crazy and Crazy=Dangerous are not automatically true, except largely in cases of 1) above - which does to my mind refer most often to certain types of mental illness that seems to strike capsuleers. The whole remorselessly killing berjillions of people thing, detachment from humanity (and its attendant expected emotional responses), etc. In many cases, though, I think that IC mental illness that isn't of that form is likely not something many other people see. After all, going on an over the top murder spree is pretty high profile and dramatic. Being depressed, on the other hand, can be something you aren't even aware of in a fairly close friend. Ditto many other mental illnesses. I have a character with fairly serious PTSD, and noone outside her family and doctors are (IC) aware of it as far as I know.