I think that's the interpretation implied here, yeah.
Now, it gets confusing, when you separately consider Moenghus and WHCB.
Do we know, or can we assume, that Moenghus was using this particular Earwan definition of madness? I don't think he was. I really do think Moenghus' attribution of mad was something closer to meaning Kellhus has fallen outside the scope of what a 'normal'/'functioning' Dunyain would do.
The WHCB sections are very strange in that we don't have a particular POV/Author to guess at credibility, intent, and/or meaning. It seems to make sense to use Akka's definition of madness to help interpret what is actually going on with Kellhus.
Do the two have to be mutually exclusive? Meaning, does one have to be right over the other?
To me, probably not. Moenghus had his son return to him from the wild gibbering on about hearing the voice of the No-God. Moenghus, at this point, would probably have a half way decent understanding of the No-God and the tekne to realize that this was a ridiculous notion - the NG doesn't speak to anyone as it is a thing without intellect (or something like that). He might not have had time to fully realize what exactly had caused this strangeness, he just knew that it was certainly not what he expected. That Kellhus was Akka-Mad - hearing Outside voices - doesn't preclude him from appear a more 'mundane' sort of mad to Moenghus.
Hmm, so maybe I've over complicated an explanation while still arriving at the same conclusion...