Was the psychiatric hospital meant to rehabilitate her?
If possible, otherwise keep her away from pointy items. Working in psychiatry years ago, I’ve met people for whom their psychiatric diagnosis was chronic, and whom you could dope all you wanted, but their psychosis never retreated. All you could do was keep them from hurting themselves or others.
Sometimes we need a way to shield individuals from the general public, without it actually being a punishment. Lady in the story sounds like an example.
Even though three others have chimed in, as OP I’m gonna give it a go as well.
First off, I’m definitely not an expert. My job was mainly to stay with people who had been constrained to their bed, using leather straps. Other times to make sure the patient had as much freedom as possible, without doing certain things. So pretty low level stuff, like talking, minding my own business, and occasionally dodging fecal matter (not figuratively!)
I met adults who had been psychotic since their early teens. And I met people who were admitted on account of a bad reaction to drugs, mainly marijuana, resulting in them being aggressive and delusional. Then the next week they would be calm and rational, behaving like you and me.
I can’t tell you what can be treated, and what can’t. But I can tell you that I’ve met people who did stop being psychotic for the rest of their life. And I can tell you that far far most patients were able to, periodically, live somewhat ordinary lives after getting help.