The truly interesting change in the character of Willie Loomis comes much earlier, when he goes from being Jason McGuire's nasty little partner in crime, to Barnabas' soul-shattered victim. THAT Willie tries, despite his own terror, to prevent the horrors Barnabas will attempt to perpetrate on Vicky and Maggie, and suffers dearly for his efforts.
The Willie Loomis who was shot trying to protect Maggie Evans was the furthest thing from insane. The one who returned to take care of Adam was an adult version of a battered child, desperate to please the parent who abused him. No wonder he spends the rest of his time on the show trying to "help" Barnabas.
But that point of view doesn't suit the concept of the new, romantic, human Barnabas, so it all has to be glossed over when Willie returns. After all, DS IS a soap opera, and flip-flopping the Good and Evil characters is a hallmark of the genre.