Trivia: Despite being listed in the opening credits, Steven Berkoff is only in the film for less than one minute.
Trivia: The Boeing 747 (G-BDXJ) seen in the background during the climactic scene at the airport is the same one used in Casino Royale to depict the prototype aeroplane at Miami. It is also seen in many episodes of the UK television series Top Gear.
Chosen answer: Insane in the sense that he wasn't completely mentally capable? Yes. Insane in that he wanted to blow them up? No. He was heavily medicated while in care and so his ramblings and confusion are supposed to be perceived as genuine. Once he starts commenting that he is beginning to remember his past, we then assume that he realizes what his original intentions were and somehow manages to contact the other agency.
But Bailey states before he kills Katja that he was responsible for leaking the post online that Marvin saw which started the whole thing. He said he took a guard's phone to do it. I believe he was very aware and was just "playing" everyone.