Yes, that did unfortunately happen in the history of psychiatry. I am talking about modern American psychiatric practices (say, the last 10-20 years).

If the proposition here is that mental health disorders are fabricated maliciously in order to sell more medication or enforce some sort of social order, then I don't see how the very rare court-ordered enforcement of short-term stays at psychiatric institutions could be the mechanism for that.

The vast majority of people in the US who receive psychiatric care do so voluntarily, because they experience real symptoms that really affect their life, for which they need real treatment.