You definitely aren't useless, so lets move that off the table.
Who is your contact for this job, can you talk to them honestly - is there something you could ask for that would make the job do-able?
That's not a pushy question, sometimes there is, sometimes there isn't!
I once had to produce a course for someone elses organisation, in a thing I do all the time but... I had never done a course. Time was ticking on and I got in a right state.. and when I unpicked it all with a good friend, it turned out the real reason was, I didn't really understand how to use the bloody software, that was all.
I talked to the person who hired me, explained my anxiety, she was fine, told me not to worry about the niggly bits, my friend figured out how the software worked and talked me through it - job got done, everyone happy (and the course has had great feedback!).
On the other hand I had another job, working for someone who in hindsight, had set alarm bells ringing in my head long before I agreed to the job, she was a nightmare from day 1, not only did she keep altering the brief but she was late to pay, never paid in full at each payment stage and needed to be chased for info, for payment, for everything. On top of that, she'd inviegled her way into my social media and was commenting on everything I posted, commenting on my health issues, commenting on what I ATE.. fucking food policing me.... It all got too much and whilst I finished the job and she was happy with it, it was so horrendous a piece of work Ive never put it in my portfolio and I have since blocked her so she can't pressure me again (she had a ton more 'projects' she was absolutely adamant we would work on together!)
If I had my time over again I'd say no, hell no, I don't want to so I won't.. but you live and learn.
I now mostly work with someone who knows me very well, so I can ask her to break a job down, I don't feel stupid if I have to ask what something means, and she deals with the 'talking to suity corporate types' so I don't have to. Yes she earns something for this but the percentage she gets is MASSIVELY outweighed by the stress she relieves and I get jobs via her and with her I'd NEVER get any other way. IF you can find someone like that to collaborate with.. I would really advise it (might not be appropriate with what you do, I dunno!).
If you do decide that you simply cannot or just do not want to, do this job - fine, thats the beauty of freelance - 'I am sorry my health condition has worsened meaning I am currently unable to work and don't know when I will be available'.. if you don't feel like saying 'I don't want to'.
We get to pick and choose and whilst there is pressure to say yes to everything... it's not necessary, in fact it's damn unhealthy! I found by saying no to stuff that doesn't totally light my fire.. I am SO much happier, more productive and in fact, more sought after for the sorts of jobs I want, than when I was saying yes to everyone and their dog (literally!).