Never heard about that. Are there any studys, reports, etc, saying that stopping toughts creates madness??.
If you use forceful methods and do it regularly you can cause mental illness.
There's a few ways thoughts can be stopped.
1. in a forced manner, in which all thoughts are suppressed intentionally.
2. through concentration, where in a relaxed manner you simple decide not to think anymore, or your concentration becomes so one pointed that thoughts just stop.
3. by not clinging whatsoever to mental phenomena, thoughts still arise but they cease so quickly that it can seem there are no thoughts at all.
In Buddhism we would want number 3. Number 2 can be useful, and number 1 has no use, and will only cause thoughts to get worse after the fact. I doubt forcefully stopping thoughts will cause mental problems unless it becomes habitual. If we habitually suppress certain thoughts, eventually the mind will come up with other ways to express what it needs to. Which can take any number of forms, some of which may be mentally distressing.
The difference between number 2 and 3, is that number 3 does not require concentration, only realization and mindfulness. Number 2 is useful for developing the capacity and wisdom for number 3.
Just my opinion though.
As a side note: When you forcefully suppress thoughts there is always a feeling of stress, or mental pressure associated with it in my experience, but through concentration/mindfulness there is a feeling of ease/freedom/relaxation associated with it.
“Freedom is secured not by the fulfilling of one's desires, but by the removal of desire” – Epictetus