When an organic illness is treated as if it were psychological, and the physiological cause is left uncorrected, there is a very real chance it will completely disable the patient, or even kill them. I know of a case of miliary TB where the patient died after being treated with ECT. I can point to figures for mortality and life expectancy among those with "serious mental illness", as currently defined, which look bad even compared with prospects for patients being treated for cancer.
As an example, consider the incidence of seizure disorders, which can easily become disabling or even fatal. Seizures are regularly found in cases of autoimmune encephalitis. One well-known fact about seizures is "kindling", the more seizures you have, the higher the probability of further seizures. Neglecting a treatable cause can result in irreversible neurological damage and long-term disability.
I am arguing against the idea that psychiatric treatment is harmless, provided the treatment itself does not cause measurable harm, but merely suppresses symptoms. Neglecting a seizure disorder is an example that can lead to death or permanent disability when it finally becomes impossible to ignore. I am thinking of a case that ultimately produced a seizure that broke the patient's back.
Another problem shows up with stroke, and I am aware of cases where a patient's strange movements were blamed on schizophrenia, when a nurse transferred in from a different ward took one look and said "call the doctor, this man has had a major stroke." She was right.
The incidence of mental illness, at least once in life, is surprisingly high. If only 3% of a million patients have a condition like autoimmune encephalitis we are still talking about 30,000 people, a number like the casualty list from a substantial war.