That's what I thought too, when they first implemented social distancing rules in Italy.

The rules seemed reasonable: you cannot move across the borders of your municipality unless you have a written proof you have to do that for work or health reasons. All non-essential shops closed, but you can go buy groceries and essential items. 1m distance between people (in small shops only one person at a time can enter).

The rationale was explained, and the populace was encouraged to further minimize contact within reason.

Many thought it meant that within the borders of your municipality you can take long walks with your dogs. The municipality adjacent to mine stretches out towards the sea and has a few km of beaches. Some thought this weekend was perfect time to have a walk on the seafront.
Some people came technically from a different municipality and 400 got fined 200eu. The city council reacted by closing the beaches and seafront road and limiting access also from people from the same township (allowing only people living strictly within a few hundred meters).

Similar stories with people being either fined or strongly criticized for walking their dogs a bit too far from their homes.

Also people who had small plots of land to tend (now it's olive tree pruning season) which were not adjacent from where they live, were publicly denounced for unauthorized 'non essential leasure activity' (despite going there working alone or with significant other, would not cause them any contact with people). Agricultural activity, the newspaper said, is permitted, but you have demonstrate that's your job (which here means to be registered as a professional agricultural producer, a form of business incorporation that you just don't do if you have a small family plot of land; and now offices are closed and you can't register a new one).

A newspaper has FAQ section where I read a case: "two parents work from home and ask their child's grandmother can come and babysit" the answer is "no, because they work from home and babysitting activity is only allowed if the safety of the children is at risk". (Those who made those rules clearly have no idea what working from home means....)

I can't but groceries for my 80yo in-laws because they live 20 miles away. In theory, supermarkets offer an online order and delivery. By the time we managed to get past the outages in the registration process to the website, all deliveries were booked until the end of the month. I have faith local authorities will find a way to care for the vulnerable population, but I assure you: it doesn't look like a minor limitation.

Every day it looks worse. The more you talk to people, especially those living in cities where there are no places they can walk (I live at the foots of a mountain, it's easy for me, I can just walk in the woods and meet perhaps one person). Most people are cut off from this leisure activity.

I'm worried how this will affect people's mental health.

I'm in two minds. On one hand I do understand the rationale behind social distancing, I'm sold. On the other hand, it seems this has gone too far. There are no shades of gray, everything is black or white: "you're either have to do all it takes to limit chances of contagion, or you're not doing enough" seems to be reasoning.

The relentless obstinacy of the exponential function that lags behind the tally by days/weeks, makes it obviously impossible for people to notice any effect of their massive collective efforts. Of course we had twice as many new deaths than last week. They were people infected before the strict rules took place last week! And the cumulative numbers will grow even when the rate will slow down.

In the meantime people start to freak out and take extra measured. The idea of sanitizing the streets has been floated (and then retracted); many people I know have reacted by disinfecting their shoes every time they go out (clearly, they reason, the ground is infected too).

Anyway, I don't know what you can draw from this anecdata. YMMV, Italy is a funny country anyway.

There is a weird around rules here: people don't follow rules, so clearly we need more rules (people don't pay taxes, so we raise the taxes to make up for it). Many people do follow rules (many people do pay taxes, they can't avoid). But some people don't follow rules (and for some people it's easier to avoid paying due taxes). The collective shaming against those who don't follow rules is paid by the majority who do follow them and would benefit if the rules were a little looser.