It is exactly that..mentally unfit. It is also broken down into categories like bi-polar and schizophrenia would be in one, depression and anxiety would be in another. But they all fall under mental illness' that deem you mentally unfit for duty depending on severity.
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Conscientious Objectors, College Students, and Mentally and/or Physically unfit males.
College students and mentally/physically unfit men are usually deferred from military service.
Physically unfit or mentally unstable, or a college student.
Poor eyesight
If he was a college student or mentally and/or physically UNFIT to serve his country.