This idea has been comprehensively debunked and it is now clear that both of these concepts have run side-by-side and medieval courts often went to great lengths to try and distinguish the two ‘states’.
I’ve just read a fascinating article about ‘Demonology, Neurology, and Medicine in Edwardian Britain’ from the Bulletin of the History of Medicine that showed that this tendency continued well into the modern age.
Evangelical demonologists, some of them qualified doctors, incorporated medical advances into their theories – even using the dramatic discoveries of the ‘father of neurology’, John Hughlings Jackson, as a way of better ‘explaining’ our susceptibility to malign influence:
The Jacksonian hierarchy of higher conscious levels, the sensory midbrain, and the lower reflex centers was mapped onto the Pauline division between spirit, soul, and flesh and the psychological division between the supraliminal, the subliminal, and the body (cf. 1 Thess. 5:23 and Heb. 4:12). As Penn-Lewis argued, the lower nervous centers of the midbrain and the medulla could be seen as corresponding to habit and nature, “the law of the organs,” which frustrated man’s attempt to serve God.
This association of the soul with unconscious animal instincts revealed its vulnerability to the possibility of demonic infection. Indeed, many late-Victorian authors had argued that the newly discovered subconscious or unconscious mind provided the perfect medium for demonic activity: connected in psychology and literature to dreams, instincts, passions, and madness, it was seen as a gaping wound in the human personality through which invasive agents could undermine their hosts. Certainly many demonologists believed that invading spirits possessed a natural appetite for nervous tissue as they sought to recapture the nourishing somatic form they had lost.
This is a common pattern, of course. Carl Sagan’s book famously described science as “a Candle in the Dark” against a “Demon-Haunted World” but less attention is paid to the fact that every new illumination casts a whole new set of shadows for people to misinterpret.
Link to PubMed entry for demonology and neurology article.