I worked in a residential psychiatric clinic in the seventies with patients such as you describe, some had been as you say incarcerated for crimes such as pregnancy/bearing illegitimate children, relationship with "inappropriate"man or to hide incest within the family and they had been institutionalised to the extent that they would have found it impossible to function elsewhere..but even then their care exceeded that outlined in this story.
It is this place (different owners now)
The Priory Ticehurst House
Psychiatric hospitals do not I'm sure operate as this woman's parents did in this story, there may be locked wards but the physical environment I've witnessed in recent years to date is more like a student hall of residence, with a measure of freedom for even acute patients. (unless you are talking about prisoners)