While most info on the disease is unknown, it might be caused if a sponge morphs too much.
Role in episode
When SpongeBob gets carried away with imitating others, he contracts Mocking Mimicry Madness. He ends up forgetting who he is, and his friends make numerous attempts at trying to help. However, matters end up getting worse as SpongeBob tries to mimic them all at once. Sandy tries to bring him to his senses, but this causes him to have a breakdown and he leaves town thinking he is a freak.
He goes to live in a cave where his friends find him. They all do their own imitations of SpongeBob, who ends up getting cured after realizing who he is. However, all of his friends contract the Mocking Mimicry Madness. Initially, SpongeBob is shocked, but then they all have a good laugh.