Right, it has psychological effects on anyone who it targets (directly or indirectly). There's a debilitating mental burden that gets put on you when you are constantly trying to defend yourself or others against assailants who don't adhere to any basis in reality or principles. Most likely it's a social problem; the pain of challenging your own community and being alienated. It's also commonly seen in people who have to deal with narcissistic abuse.

Just as a historical anecdote, it was common for the resistance in the Soviet union to have mental health issues because of having to wrestle with all of the propaganda, insane behaviours, accusations and attacks. The Soviets took advantage of that by accusing anyone who had negative views of the government or culture of being schizophrenics and locking them in institutions.