It was a while after the battle with Larry Lake and Mono, Larry Lake was accused of setting trap spells beforehand, which was the night before the trial had started, though it was an unfair tactic there was no such rule that didn't allow cheating or foul play, so the judges took a vote and decided to make him skip the trial, henceforth, making him an adventurer without finishing the trial, this was also because he judges found that his traps would be very useful in any sort of mission.
Larry Lake wasn't mental or emotionally unstable, there was nothing wrong with him, he could talk like a normal person, act like a normal person, think like a normal person, and make his mind on his own like a normal person. The persona he took on during the trial was a fake.