Instead of Virtuous not being added onto Atlantean items, it will instead become a new enchant when applied: Cured. This removes the insanity, but it doesn’t do anything else, so no warding and defense. You still get the atlantean cosmetic change and the bonus stat, but without the insanity
I figured, the game doesn’t prevent you from putting fire magic on Sailor’s fist or water into thermo fist, it just creates a neutralized scald effect, so why not do the same for items?