The diagnosis is she is suffering from epilepsy. More specifically, thanks to my research on Wikipedia, it is a rare form of epilepsy known as ADNFLE (Autosomal dominant nocturnal frontal lobe epilepsy).
The symptoms fit the description with involuntary fist clenching and arm movements (too insignificant to mention to a doctor) coupled with screaming that has been dismissed as nightmares.
Her condition now is that of a helpless childlike state, with difficulty communicating- verbalizing thoughts and a tendency to go through motions of normal activity without being fully conscious of what she is doing. For example, putting on a pair of jeans when she is already wearing jeans.
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