Some more information for those who may not be aware of this.
In the U.K. there has been a general closing of mental and long stay hospitals and a policy of care on the community. This has been happening for some time.
An awful lot of mental illness - dissociation, psychosis, ptsd etc comes about because people are placed into stressful conditions that they can't cope with. Some people cope better than others. They get anxious and sometimes depressed about those conditions, which is their mind's way to telling them to change something.
If they don't then it often (not always) escalates. What it escalates to varies - one person may get psychosis and lose touch with reality. One person might develop epilepsy like symptoms (non-epileptic fits). One person might have flashbacks to violent situations and be violent as they think they are in the past.
There are limited places in hospitals and generally people are only on hospital fpr as short time as they system can manage because the beds are hugely in demand.
To the person who asked is it cyclical - sort of.
Imagine someone who develops anorexia. They are "cured", after a shortish hospital stay and many years of therapy/work with their family. But if they are under stress again it's likely to come back. Think of it as like having a weak ankle or a weak knee. If you overdo the exercise on it you can sprain it again very easily.
So anyone who has had severe mental illness at any point is advised to keep a look out for the symptoms of it again. They're generally advised to reduce stress.
They aren't kept in long term hospital because those are expensive and paying people PIP is a lot cheaper.
Some of those people will recover and be able to work in low stress jobs. Some won't.
And some employers bluntly won't want them.
Most employers want an able-bodied employee who can work flexible hours and is qualified for the job. Anybody who is disabled tends to be less likely to get a job and that applies whether it is physical disability (wheelchair or similar) or mental disability.
Worldwide, people with mental health problems are treated in many different ways. In Ghana they are considered witches and will be chained and beaten. In countries without a benefits system they are mostly supported by families or by charity because every country in the world recognises that some people are too disabled to work.
In China I have seen people without legs on skateboards begging for money because in China there is no benefits system and without family you must beg. No Meaningful state healthcare either so no wheelchairs.
To the poster who said that without benefits people with mental health problems would get a job - no. Dementia is mental health problem. Would you give a job to someone with early onset dementia who cannot remember who they are and what they are doing?