I doubt the GP is drawing those conclusions from the distress of relatives, but rather from direct interaction with dementia patients.
You've never lived with someone who has advanced dementia, have you? I suppose you could be on the autism spectrum and be unable to understand body language that is obvious to everyone else. When you learn how mental trauma translates into actions, you can come to pretty obvious conclusions about the mental state of someone by those same actions, even if they are unable to articulate what's going on in their head.
When someone regularly descends into fits of sobbing when certain things happen, it's pretty easy to come to the conclusion that, hey, there's something disturbing this person. You don't need to be in their head to figure out things with other obvious signs.