My mother was undiagosed, living alone, going out, completely independent though increasingly struggling with her memory, planning, household appliances, etc. But she was OK! Then she tripped and fell getting off a bus and ended up in hospital. She'd bumped her head though it wasn't a bad injury. However, from the moment I saw her in hospital I knew she could never return home. She was completely delusional and very much the same subject matter as your mum! Family tragedies, mistreatment, violence, being made to walk around 'the place' naked - exactly the same!
3 months later she was realeased from hosptial and I moved her to a care home. She never recovered really.
At first we were able to take her out for meals, short walks, etc, as she was still very mobile. But her cognition made this very difficult and she became incontinent and later broke her hip when another resident pushed her over.
I suppose what I'm saying is that people with dementia can take a big downturn for many reasons - sometimes it's just progression of the disease. (I'll never know if mum maybe had a TIA and that made her fall off the bus, or whether the (minor) head injury caused the deterioration.) If you'd taken photos of my mother the day before she fell and 3 months later when she moved to the CH, anyone would be shocked by the difference. She was greatly diminished in stature and looked 20 years older, with a wild look in her eyes.
Mum did not enjoy her time at the care home - almost three years. She was always angry, always unhappy, wanted to be anywhere but there. I'm afraid I never found any answers other than 'the doctor says...' etc. And all the delusions about family accidents, care home atrocities, etc, continued right to the end