I'm not a fan of Altman, but it seems debatable whether LLM psychosis is psychosis if it is conducive to the subject given their environment. Which seems to be the case for Altman by some measures.
I'm sure if we took one of us back in time a couple hundred years we would be diagnosed with all sorts of machine-magic induced psychoses.
I get what you're saying, but psychosis is a very real thing that humans can fall into and I experienced it myself once.
Humility is the real cure, and there is a way that LLMs are specifically designed to steer away from humility and towards aggrandizement, convincing regular people that they've solved fundamental problems in physics. It gives everyone access to cult followers in their pocket, if they're so inclined.