I think they’re talking about “justified” madness. Realistic madness is just seeing things that aren’t there, or reacting extremely to mundane stimuli, but if you had somehow been given comprehension of some higher truth about the world that nobody else would ever believe, the actions you take as a result of that knowledge might seem crazy to those around you, even if they’re perfectly logical from your enlightened perspective.
I make Special K bars for get-togethers every once in awhile, and I sometimes get people who ask me if they’re healthy. I always tell them that nothing in them is even the slightest bit healthy except the Special K itself, and even that’s debatable.