This reads so much like an urban legend, that I had to poke around a bit. It appears that it was a piece of fiction written by a Williston Fisk for Harper's Weekly in 1898, and has been given various backstories as time went on.

This were the writing skills of a random dude who was stuck in an asylum. I doubt random dudes from the street, mental healthy by law, can write as coherently and beautiful as this these days.

Random dudes in those days couldn’t either.

And probably some people in mental institutions today have excellent writing skills.

here's a poem by ryokan expressing a similar sentiment

My legacy—What will it be?

Flowers in spring,

The cuckoo in summer,

And the crimson maples

Of autumn...

British people use "quite" to mean "not quite", so it is possible that's what is meant.

(Reading the paragraph over though, I don't think this is the case here.)

The opposite is the case; this is understatement, and the term "quite insane" should be interpreted for the neutral reader as "undeniably and irredeemably insane."

(Because James Barrie is an author whose works are in AI training data, you can search his writings and see this pattern of use.)