I was wondering the same, how does that work with him pleading not guilty?

Depends. Particulars vary by state, but if such a claim was made then the court would likely order a psychological evaluation. In my state, if they determined that because of a mental illness he was not competent to stand trial or lacked capacity to appreciate the (legally) wrongful nature of his (alleged) actions at the time of the alleged crime, then either the charges might be dropped or he might be found Not Guilty by Reason of Insanity. In either case, that often (particularly for violent crimes) results in judicial commitment to a psychiatric hospital. Which can often result in a longer term of confinement than the prison sentence would have been.

Exactly, what the fuck is this weakass argument? Luigi is innocent and needs to be released ASAP on the simple fact that the police had two years to build a case against him yet there still has been no trial. It's clear that they have nothing on him; just let him out already so we can all move on with our lives! This is a gross abuse of the justice system. His right to a fair and speedy trial has already been violated several times.