Bill James asked this question in his original Baseball Historical Abstract. Wadell displayed some seriously weird behavior. Here are some of the stories I've read:
1. He wasn't given his salary all at once. The coaches would give him a few dollars at a time because if he received it all at once he'd vanish for days.
2. He'd chase fire trucks.
3. Opponents would try to distract him by giving hims toys. They's lay them out ont he field and say "Look, Rube!" Waddell would then lose focus on the game.
4. The had teammates follow him on days he pitches to make sure he came to the ball park.
I doubt Waddell was medically mentally "retarded". He pitched in the major for many years and had great success. A truly mentally "retarded" person couldn't possibly have the mental capacity to play major league baseball. It's quite possible he may have had some chemical imbalance that could be treated today.
Waddell was not autistic nor retarded
He was uneducated and had fun playing baseball, while drinking too much at times
Why was Rube not autistic nor retarded
He has many quotes noting his knowledge of the game
One game Kid Elberfield got 4 base hits off of him in a game, Rube stated after "Darn, if I knew that I would have walked him 4 times to get the no hitter" doesn't sound like mental problems there
True Hughie Jennings had the toys at 1b box to distract Rube, but even Ty Cobb didn't try and rag on Waddell, because when he got angry or slighted he focused and would beat you senseless, not somethign an autistic or retard could accomplish
He would trash talk like Deion Sanders, and against someone like Cy Young...that cost him big time as he tossed a 1 hitter while Young pitched a Perfect Game, Waddell never tried to be cocky to Cy Young again, not something someone with autism or retardation could accomlish
He was just fun loving, a Rube, and charismatic man who loved kids and women and beer (not booze, he only drank beer) he also loved wrestling and loved to take on big guys like Buck Freeman and Charlie Hickman
His Catcher Ossee Schrengost by all accounts was even weirder then Rube and El Halo, Rube didn't rip his arm out in a drunken fight, he hurt it playfully fighting with Andy Coakley (who would go on to coach Columbia for 40 years )
If anything Rube was just one of the more kaleidoscopic characters, a braggart, an oddball, a uneducated country bumpkin in baseball's history that got phased out when baseball became more professional driven during the 60's
Rube Waddell was a real life Peter Pan, nothing more, nothing less.