What is the authenticity of the hadith: "Remember Allah until they say [you are] mad"? What is the position of the hadith scholars concerning it? And can this hadith be used as evidence for the permissibility of communal dhikr and dancing?

The Hadith (definition), "Increase your remembrance of Allah until they say: 'He is mad,'" encourages abundant remembrance of Allah.

This Hadith is not considered evidence for the Sufis to justify collective remembrance (dhikr) with shouting and dancing. Such practices contradict the manners and ethics of Islam, which call for moderation and tranquility in movements and voices, as stated in the Almighty's words: ﴿وَاقْصِدْ فِي مَشْيِكَ وَاغْضُضْ مِنْ صَوْتِكَ إِنَّ أَنْكَرَ الْأَصْوَاتِ لَصَوْتُ الْحَمِيرِ﴾ [Luqman/19] (And be moderate in your pace and lower your voice; indeed, the most disagreeable of sounds is the voice of donkeys).

Rather, a Muslim is praised for moderation in their movements, and the servants of the Most Gracious walk upon the earth humbly.

The praiseworthy remembrance is that which is accompanied by humility and the submission of the heart to Allah the Almighty, and the stillness of the limbs, as stated in the Almighty's words: ﴿وَالذَّاكِرِينَ اللَّهَ كَثِيرًا وَالذَّاكِرَاتِ أَعَدَّ اللَّهُ لَهُمْ مَغْفِرَةً وَأَجْرًا عَظِيمًا﴾ [Al-Ahzab/35] (And the men who remember Allah often and the women who remember Him - Allah has prepared for them forgiveness and a great reward). In humility, there is tranquility and calmness.