Tom's not too much, Ted's a bit nuts (7)

I believe the answer is:

touched

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'nuts' is the definition.
Both the answer and definition are adjectives. Maybe there's a link between them I don't understand?

I cannot understand how the rest of the clue works.

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(Other definitions for touched that I've seen before include "begged a loan" , "Moved sympathetically - mad!" , "Felt" , "Made to feel sympathy - or slightly mad?" , "Made contact" .)

I've seen this clue in the Sydney Morning Herald.

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