I thought Leo's last line made it pretty obvious that he hadn't regressed. Saying that showed he knew the difference between fantasy and reality. And I don't think there's any way they give him a lobotomy when he is clearly living in reality.

And I think he was crazy the whole time. Ruffalo having trouble with his holster was a hint. The one thing I can think of that doesn't add up is that lady writing "RUN" in his notepad.