I think it's definitely had the positive effects that you mention. People are far less cruel, more understanding, and also WAY more willing to go seek help with these types of problems than they used to be.
The negative effect is that anytime something becomes romanticized, it's human nature for people to adopt it as an identity, which introduces a lot of noise to the conversation, and we lose some of our objectivity toward it, as now there's an emotional attachment to the label itself. For example:
Back in the day (early 2010s?) of tumblr, when people first started collecting mental health labels like personal trading cards.
Or now, with the plethora of pseudoscientific misinformation about mental health on tiktok: random people are just making up terms or symptoms and pitching them in a nearly universally relatable way like horoscopes.
If you offer people a label that makes them feel part of a group, supported, and potentially explain why a bunch of things in their life are hard, it's in our nature to gravitate toward that.
All that being said, I still think it's a net-positive effect. This is just what happens anytime something clinical enters the mainstream conversation.