Menninger never considered that “crime” and “sin” could be related through nestedness.  To me, it seems that …

The “judgment of crime (with state punishment)” puts “particular acts of sin” into a “normal” context.

Also, “sin” is “the situation where the normal context of ‘crimes’ appears real”.

This may be written as “crime(sin())”, corresponding to the general categorical nested form of “normal context(actuality(possibility))”.