In short, I believe he had an un-diagnosed case of classic paranoia. It's been promulgated that he was a "coward" or "grossly incompetent", but I disagree (somewhat) with this. He definitely was a "lousy" general, but it's the reasons for his actions in North Africa on which I wish to theorize. All of this is just my opinion.
(1) He was on Gen. Marshall's "good list" i.e. the secret list of officers Marshall knew and worked with during his career that he believed showed promise, and was a candidate for future promotion by Marshall. Because he was on Marshall's list, and because Marshall was a shrewd judge of officer abilities, Fredendall's "bad qualities" could not have been manifest during his peacetime rising career to corps commander. He appeared to Marshall to be at least competent if not promising. But under the stress of command in North Africa his mental illness rose to consume him and affected his judgment. The following are three examples that IMO show that mental illness was present.
(2) He tried to get Gen. Eisenhower to get him a bullet-proof staff car. It was denied.
(3) He had his engineers build a Corps HQ by blasting caves into rock 70 miles behind the lines. (Eisenhower was shocked when he learned of this.) Fredendall probably had received a regular intelligence warning about the German air attacks targeting headquarters, whenever the Germans could determine their location. This intelligence triggered his brewing (and perhaps lifelong) paranoia, rising to a true incapacitating mental illness and the unfounded belief that the Germans were targeting HIM specifically. This is a classic symptom of paranoia. It was an irrational and unreasonable belief that HE was actively being targeted by the Germans.
(4) IMO, the most telling example of his illness was the strange messages he sent. He would not use the standard grid map references in his messages. He would also send encrypted messages (securely encrypted on a SIGABA machine, which all other officers felt was completely secure) that would be in "guarded language" even though it was encrypted. Example: ""Have your boss report to the French gentleman whose name begins with J at the place which begins with D which is five grid squares to the left of M". That's verbatim from an encrypted message he sent during the crisis. The recipients of these messages spent as much time trying to understand what Fredendall meant as the actual machine decryption of the messages. These nearly incoherent messages proliferated during the Kasserine crisis. Apparently, he feared the Germans were "listening in" to every encrypted message he sent. To me, this can only be a case of his blossoming paranoia taking over his faculties.
There may be more instances that I've not read about, but these are enough to convince me that he was suffering from clinical paranoia just shy of a true psychosis.
Feel free to roast me or chime in.