When I first started reading agent blogs, there were a lot of comments about the hazards of crazy writers. It wasn't clarified what this meant. Simply that being crazy was bad and agents wanted normal clients. Appearing as though you were crazy would mean a swift trip to the pit of rejection.
I took it to mean agents didn't want non-neurotypical* clients and that I'd better tone down anything atypical I might say.
It was only later I found discussions that were more specific. They didn't mean crazy at all. They meant the person who follows them into public toilets to pitch a manuscript. The person who responds to a rejection with a death threat.
Though some of these writers may be non-neurotypical, most of them are not. They're caught up in special snowflake land, where they're entitled to a book deal. It's not that most don't understand they're being inappropriate - they just think they're too important for it to matter. That's self-centred, but in itself, it's not a sign of anything more. Even in cases where it turns to violence, it's not a sign. Many violent people are completely neurotypical. They're just not very nice neurotypical people.
I'm not someone who believes the word crazy should be removed from the English language. I'll use it to describe myself**. The problem is in this context, crazy is being used to mean any bad behaviour and anyone dangerous.
The result isn't good for the industry. Differences in thought processes (a.k.a. being crazy) are not a bad thing in a creative industry, where a different perspective can bring something new. A lot of agents actively want to see that diversity. Yet they're also discouraging it by saying they don't like crazy people, probably because they're not thinking through the range of people who might identity themselves in that category.
It's not as though there's any need for it. When writers step over boundaries, we can call them what they really are. Misbehaving writers works just fine. If they break the law in the process, call them criminals. But what you can't assume is that they're crazy***.
* People have differently boundary lines for what is and isn't called crazy. Some may only include situations where a person is at risk and needs help (such as someone depressed who is on the verge of suicide). However, a lot of people are thinking about any non-neurotypical person (and often in a negative way, where it's seen as a illness regardless of whether it is or not) even if they don't admit that out loud.
As an example, when I say I'm dyslexic, I've had people express their profound sympathies and say how terrible it must be. They act as though I've just announced contracting malaria. Few people would say dyslexia is a sign of craziness or a disease, but the underlying attitude to what they're saying makes it clear that's what they think****.
This is why when I see mad or crazy, I've learnt to assume the worst.
** Where I live, there's more of a culture of crazy being good. Bad crazy happens, but crazy is not inherently bad. Crazy / mad were positive labels to apply to the ways I was different. This doesn't mean it's wrong for someone else to dislike use of the word, as we all have different life and cultural experiences. If in doubt, play it safe and use something else. And even in my case, if you use crazy to mean all things bad, and crazy people to mean people you don't like, I'll be giving you looks.
*** Should it turn out they are indeed crazy: 1) It doesn't mean everyone who could be called crazy is dangerous. If someone is a danger, it's usually to themselves rather than others; and 2) More anti-social behaviour still comes from neurotypical people, because they are the majority.
**** Another example is how quick people are to assume any author behaving badly is an autistic or Aspergers person. This is often done at times where such a diagnosis makes no sense, because it's clear the perpetrator understands social cues and is manipulating them. Again, few of the people saying that would directly say an autistic person is crazy, or that it's a bad thing, but the wording makes it clear that's the case. The willingness to blame all bad things on non-neurotypical people is a sign of a deeper problem and does create a hostile atmosphere.