Use it to comment on someone's mental clarity or alertness, usually implying a lack. After his sleepless night, Jim didn't seem all there at the meeting.
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Indirect Speech
It's often used not to directly call someone insane but to hint at it tactfully. I wouldn't trust her judgement; she isn't quite all there.
Pro Tip 3/3
Negative Contexts
This phrase is commonly used in negative sentences to politely state someone is mentally off. He's not all there ever since the incident.