He is just a "tad bit" crazy, most likely from his incredibly old age. seeing how June is known as "young" for a Dryad and she is 500ish years old then for him to be an elder he has to be at least 3-4x that age... It would be surprising if he wasn't just a bit crazy from having that age.
From #273 we know that he likes to be the centre of attention some of the time not all just some, seeing as how he was in another place completely and suddenly appeared just to spout a crazy sentence.
June: "We're back, elder Willow. And I brought a Chosen One with me."
Elder Willow: "Oh, execellent!"
Elder Fungus: *Is thrown into frame* "Back in my day, we had two chosen ones!"
Because of that, June doesn't really like talking to him and would rather talk with Elder Willow who is a sort of mother figure to her, while Elder Fungus is more like the crazy grandfather.