God is very very clear about what is real and what is an illusion.
In this clarity, God is wholly sane. Sanity means there is no distortion that denies the truth.
For example it is absolutely impossible to be separate from God because God is infinite and is everywhere real. It is not possible to go anywhere else because there is nowhere else. To then believe that there IS somewhere else to go, MUST be insane, because it is literally impossible. You would have to be totally faking it and kidding yourself. You'd have be believing in a lie, and deciding that illusions are reality. That is hallucination. That is insanity.
For God, the truth is true and nothing else is true. He has no self-deception or denial, and is 100% clear on what is real. There is no unreality in Him. There is no distortion. There is no insanity and therefore He is not mentally ill.
Mental illness accounts for every illusion, every form and every way in which you can seem to be separate from God. All sicknesses, all problems, all guilt and fear, and all death, is all a form of mental illness. It comes about by believing that an illusion is in fact reality, or that a lie is the truth.
Most people in this world are insane. It's just a fact. They are insane (me included) because they believe illusions are reality and that an illusory world is not only possible but happening with serious consequences. In God's reality this world CANNOT exist. It is a picture of impossibility. All who believe in it existing and happening for real are deluded, and thus are mentally ill and insane.
We need to learn what is absolutely true per God's Will, and what must therefore be unreal. And then we must be willing to withdraw our sense of "reality" from that which is not real, and RECOGNIZE that it is an illusion. Currently our failure to recognize illusions for what they are is the entire foundation for all suffering and death.