It's certainly feasible that in many cases it would be chronic and severe enough to interfere with necessary responsibilities but that doesn't take us straight to "everyone who showed psychosis was exiled or executed." We know that some cultures did have explicit roles and accommodations for people who were way out there.
One of the graphics the author showed mentioned this but it didn't otherwise come up: look at the tradition of the holy fools in some slavic cultures. This got rolled into christianity but it appears to predate it in those cultures and straightforwardly includes people without obvious productive benefit for their society.