Her counsel, Debbie Goodlet, told the court her client clearly understood the "nature and effect'' of her name being made public.
Sensible Sentencing Trust said the decision provided "further evidence of the criminal-friendly'' justice system.
National spokesman Garth McVicar was left stunned.
"It's unbelievable. I can't see any New Zealander agreeing what what's happened,'' he said.
"My thoughts go out to the victims involved, and I know one of the women personally. She is devastated, traumatised, hurt, angry.
"I think it's time for all political parties to make a stand on this. The criminal justice system has left itself wide open to be abused.''
Auckland University law professor Warren Brookbanks explained how the court reached its decision.
He said that New Zealand's rules governing fitness to stand trial have been around for more than a century.
They are designed to protect people who are vulnerable and lack the capacity to defend criminal charges, Prof Brookbanks said.
He explained, "The legislation defines unfitness to stand trial as based on the requirement that the person must have a relevant mental impairment, which renders them unable to either understand the proceedings, instruct counsel, or enter a plea.
"That ruling must be made by a court after hearing psychiatric evidence.
"If the evidence makes it clear to the court's satisfaction that the person is suffering from a mental impairment - and there's no question that dementia would be a relevant impairment - then the court must make a finding that they are unfit to stand trial.''
Once the court rules a defendant is unfit to stand trial, a number of options are open, he said.
"In very serious charges, especially if they are charges which have occurred relatively recently, it would be normal for the person to be made a special patient under the Criminal Procedure Mentally Impaired Persons Act.
"That means they are then detained as a security patient in a psychiatric hospital, pending the recovery of their mental health, with a view at a later stage to be brought back for trial.
"It will only make that order to detain them as a special patient if that's necessary - and that's the language of the statute - if it's necessary for the protection of the public.
"In a case where a person may have been charged with very serious charges - as in this case - but the court concludes, on the basis of psychiatric evidence that detention as a special patient is not necessary for purposes of public protection, because they don't consider it a risk that the person is going to, at this stage at least, injure other people, then the options are every limited.''
If a defendant suffers from an acknowledged mental disorder, which is not treatable - like dementia - and does not provide a risk to the public, the only option for the courts is to immediately release them, Prof Brookbanks said.
"I suppose - and I don't know - that this was the option the court took in this case. Although he was mentally impaired, there was no treatment that could be given to him in a psychiatric hospital and there are no other options.
"The court must have been satisfied on the evidence presented that the special patient order wasn't necessary in the interest of the public. And, presumably the evidence must have suggested that although he's committed these historic criminal offences, the nature of illness is such that he's not an active risk to other people.''
The law professor's expert summary was supported by Alzheimers New Zealand, who said: "Dementia is a progressive, degenerative neurological condition that affects memory, thinking, behaviour and emotion. The progression of dementia is unique to each individual.''
Additional reporting Wanganui Chronicle and Newstalk ZB
