Mentally ill is much different from stupidity and dishonesty.
The pathological liar actually believes their fabrications are the truth.
"There are such unfortunates. They are not at fault; they seem to have been born that way. There are naturally incapable of grasping and developing a manner of living which demands rigorous honesty. Their chances are less than average. There are those, too, who suffer from grave emotional and mental disorders." Public Domain
This nonsense is beneath you.<quoted text>
Pseudologia fantastica, mythomania, compulsive lying or pathological lying are three of several terms applied by psychiatrists to the behavior of habitual or compulsive lying.It was first described in the medical literature in 1891 by Anton Delbrueck. Although it is a controversial topic, pathological lying has been defined as "falsification entirely disproportionate to any discernible end in view, may be extensive and very complicated, and may manifest over a period of years or even a lifetime". The individual may be aware they are lying, or may believe they are telling the truth, being unaware that they are relating fantasies
And you know it.