I feel like SK needs another stat effect emblematic of shadow. Madness is sort of a mixture between ff confusion and berserker stat effects. On enemies, it would eliminate their shield abilities and confuse their aggro, so they may start attacking each other (or still you, if you're unlucky.) The stat would also create (in honor of berserker) Positive stat effects of asi, movement, and damage . This mixture would be balanced appropriately to keep it from being op but still allowing it to be awsome.
On players, it produces the same stat effects, with a couple of exceptions. I doubt any player would want to sit back and do nothing while the computer takes over the character (the only way to create player aggro confusion,) so I would leave it to a simple "turning friendly fire on" stat effect, with maybe a bit of auto aim craziness, and attacks being randomly executed without left clicking. It would also eliminate your focus (In other words, you wouldn't be able to charge). That way, there's a bit of extra debuff to replace full on confusion.
Another possible player confusion replacement, that could be quite interesting, but harder to pull off, would be to replace all other sk players on the map with monsters in your view. That way you can't tell the difference between players and monsters (like being the sherrif in Bang and killing your deputy.) Also remove pop up comments over players, to keep those from spilling the beans.
This may seem like too much in one stat effect, but I feel like confusion would be op by itself. Hence why I considered the ff berserker mixture. Also it would be hilarious to pull something like this off with a shadow haze bomb (don't get me started with curse haze. That would be way too op. I still would love a shadow haze bomb of some kind though.) I could imagine a bunch of gremlins in the haze suddenly tearing into each other, with a few that still lunge out and charge at you with terrifying buffs. Or if it happened to you, you still manage to rip through the enemies in devastating fashion, while taking massive damage, only to find out after it wears off that of the 20 you knocked out, two were team mates.
I like the hallucinations part that'd be fun.
Now the next step to this idea of yours is to make enemies that cause this status.
Hope you succeed :D