I think the phrase was coined by Dr Desmet but I could be wrong.

In general you are correct, it's largely synonymous with "mass hysteria" but the idea of a mass formation is that it's much more specific. People seem narrow-focused on a certain objective, unable to notice other things happening, and it comes about from a really specific circumstance when society is fractured and looking for anything to blame.

Desmet is the best source to learn more about it - not politically correct at all, but he is Belgian not American.