Sciocco is the Italian equivalent of 'silly' in the sense of being foolish. It isn't a statement of someone's overall mental dullness or sharpness. The same may be said of 'silly' as stupido. Once again, the listener is being foolish, stupidly and temporarily.
Two other equivalents are scembo and imbecille. In both cases, the listener is being considered silly in the sense of those who don't have all their wits about them.
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