Don't usually answer asks where people simply haven't managed to follow the text, especially if they're framed in that annoying faux-rage way, cause it makes me want to be a bit bitchy in my answer, but hey - I been tagged in.
So, Sebastian, I agree - it makes absolutely no sense at all. Goodness, the only way it might be really obvious what was going on would be if maybe, just maybe, there was some sort of being or entity that attacked people's perceptions and made them see things that weren't there, twisting their minds and or causing them to believe themselves mad or, I dunno, possessed. I mean, if such a thing existed then I suppose it might be trying to target the deepest fears of a very religious man by playing with ideas of possession and demons and stolen faith. But you're right, it's probably actual demons, something that had never been established as existing in The Magnus Archives. Because if one of Smirke's Fourteen was specifically to do with madness and perception, that would be a pretty embarrassing question to have asked, especially in such an aggressively way.