I don't think the mother is crazy, a zealot yes, crazy not at all. She believes in her religion and that is not grounds for being crazy according to any psychologist.
As for the rejecting chemo...
My father died of cancer and he did reject the chemo. My friend Andy did take the chemo and died anyway. My Aunt took the chemo and after long suffering because of it she also died. Any doctor who claims "With chemo he has like a 90% chance of recovery." in my opinion is a quack.
"According to the National Cancer Institute, the immediate side effects experienced during chemotherapy include fatigue, nausea, vomiting, mouth sores, and pain. The government organization acknowledges that long term effects of chemotherapy can range from kidney and lung damage, infertility, and shockingly even a secondary cancer years after the initial treatment.
Chemotherapy and You: Support for People With Cancer - National Cancer Institute
A research article published March 20, 2007 in the medical journal Cancer Epidemiology Biomarkers & Prevention entitled "Non-Hodgkin Lymphoma Secondary to Cancer Chemotherapy" states that the aggressive chemotherapy credited with prolonging the lives of non-hodgkin lymphoma patients is directly linked to a number of those patients later developing acute myeloid leukemia. Therefore, a powerful cycle of chemotherapy eradicates the original cancer, only to lead directly to the onset of a different kind of cancer several years later.
Non-Hodgkin Lymphoma Secondary to Cancer Chemotherapy -- Krishnan and Morgan 16 (3): 377 -- Cancer Epidemiology Biomarkers & Prevention
Sometimes the state is a bigger zealot than the people they are trying to protect.
As the parents they made a choice, and it was not necessarily a bad one. The state needs to let the parent be a parent and raise the child according to there beliefs. As long as the rights of the child are not infringed, the state needs to keep out of it.