According to Domains of Dread (pp 147):
What is clearly specified here is the character's actions (or rather inaction) in combat. I can assume the character also fails any saving throws, though I can't confirm that, since such a roll denotes the character's natural instincts and not an action they willingly take. There's nothing stated, however, about interacting with their surroundings or following commands. I believe the person afflicted with mental shock isn't catatonic; besides, there's Catatonia in the Madness list. What my issue here is, nowhere is the duration of this mental state mentioned. According, again, to Domains of Dread (pp 147):A character suffering from mental shock will take no action to defend [themselves], even if attacked repeatedly. Thus, [they] gain no benefit to Armor Class for a shield or high Dexterity score. Obviously, such a character cannot attack, cast spells, use psionics, or take any other action. A shocked character will follow a companion only if dragged along. Such movement is involuntary, however, and is limited to half the normal rate of the stunned character.
From what I understand, when you fail your horror check, you gain a mental shock and are unable to act (willingly) for the remainder of the encounter. You should be able to revert back to "normal" after the source of your mental shock is gone. But if you have to face the same encounter or similar, you may get mentally shocked again. This condition should persist (per the rules for Recovering) for a month, before you get the chance to roll a horror check at -2 to remove the effect.Future encounters with the horrific scene or one similar to it may also overwhelm the character. Such an experience entitles the character to another horror check (albeit with a -2 penalty). Failure indicates that [they] again find [themselves] gripped by this terrible affliction.
As a side note, do you get Mental Shock AND roll on Horror Results whenever you face the source of your affliction and fail your horror check?