From Worms Knowledge Base
The Insanity Bomb or grenade turns all worms that it hits totality mad (A new status effect)! From now on, crazy music plays when that worm is selected, and it laughs madly, (it may only grin inianly when a weapon costume is selected), regardless of whatever else is happening. All of this worms controls are now completely reversed, weapons may be used randomly, at a very low chance each turn it is used, a big red button may be produced and pressed (Instant Armageddon - Text reads: "Oh No, What is %Worm% Doing?" or "What have you there?" etc).
Health Packs cannot heal insanity, but the worm may randomly recover on its own, or through some other means.