I still don't like the idea that an Instructor be involved in deciding medical outcomes without trained knowledge of how these conditions manifest. Assessment forms are a very clumsy way of determining anything. Sounds more like AvMed passing the decision buck to somebody who does not understand the consequences if things get ugly. Two majors ways it can haunt you, one, they dont get a medical and blame you, two, they get a medical and down the track injure somebody or damage property as a direct result of their condition. Then the witch hunts begin.
The decision of medical fitness should be up to the specialists involved in the treatment. If CASA does not like that specialists report, they can ask for a second opinion from another specialist.
As far as dangerous behavior that's a completely different thing. If somebody displays deteriorating mental fitness to the point its an obvious hazard to their workplace they need to be removed from the workplace and treated accordingly until fit to return.