Transformed human isn't quite the best term indeed.
From his stats, the vibe I got was of a delusional object, yes. But he could theoretically be the ghost of Gaius Julius given a new physical body (in that sense, "transformed human"), and an in game character wouldn't be able to tell the difference. That's why I said "we will never know". ^^
Yeah, i kinda saw Julius somewhat as our "Lumière" when i read the sheet 
Characters in the game don't know, at least usually.
But from a rules perspective, we (the players) certainly do.
I would also note that the Transformed Humans category is specifically defined in RoP:M. They are still recognizeable as having been human, either physically or as ghosts/spirits.