I met a girl last year, she was obsessed with me from first sight. Her one friend told her to calm down, not be so obsessed. She did not listen and proceeded to manipulate things to accelerate our relationship. She was paranoid and possessive. As her mental issues started to manifest more and more I could not really trust that I wouldn't be stabbed to death in my sleep. Once we broke up (she initiated the break up - as a test I presume, to see if I would fight to have her back) I decided I had enough of crazy town and let the breakup stick. Much drama ensued (she insisted I had women on the side) and now 3 months on I have a distant cyber-stalker and get the odd little message of harassment.
So, a bit different to your friend who landed up in an institution but there are some parallels to be drawn. The girl I was seeing would only hear what she wanted to hear. She would jump the gun and told me of these extravagant gifts she had bought me (she only mentioned them after the breakup). So it could be (MAYBE) that the guy who strung her along was trying to tell her no and she would not hear it? I say MAYBE because if you saw hard evidence of him being a douche then that is a different story.