I have seen my fellow students (good friends) suffer bereavement, depression and self-harm, and none were ever told that they were no longer welcome at the college, or the university, nor treated like criminals[1] as described here.
There are pastoral carers, both religious and non-religious, and councilling services based at different levels within the university, and there is (of course) NHS healthcare as well.
If people do take time out (usually a whole year at a time) they return when they feel well enough, not when they are re-approved as sane by some university figure concerned with PR.
Lying about being "OK" at every turn is also not something that happens. Of course, people don't always answer in detail when asked how they are, as social convention dictates, but it was entirely normal to say that you were snowed under with work/extra-curricular stuff, or that there was something bugging you. Either that or I was doing it wrong the whole time.
[1] == treated like mental patients 40 years ago. Also remember that something like 70% of all inmates in British jails have a mental health problem.