It is shocking.
To try and reassure you, I am sure he would have a probation officer and taking medication for schizophrenia would be compulsory. Often medication is given by injections, so at least the authorities would know straight away if he missed any. And you may be surprised that there are already people on the sex offenders list living close by that you know nothing about. Or people with untreated/undiagnosed mental health issues or people heavily impacted by drugs and not in their right mind.
On the other hand, if you feel strongly about this, see if there is a group protesting the decision. Or start one yourself and start lobbying for change. If enough noise is made, you may get somewhere.