In this case, my suspicions are aroused because it seems very strange for a specialist usage of "X" to mean "X and Y", where Y is actually the important or salient part of the concept (here, "X" is "best interest", and "Y" is "incompetent to decide"). My main alternative hypothesis to your being correct is that "best interest" does in fact mean what it ordinarily does, but that judges only ever consider it in the case of a person who has been judged incompetent; so that my criticism would again be directed at the judge, for failing to mention the part about the person being incompetent.

This is a fair concern, although I don't think I'm confusing denotation and connotation in this case. I don't know for certain that British legal terminology follows American, or that a doctrine for child custody disputes and child-removal-from-home proceedings also is used for legal proceedings involving the mentally handicapped.
I think it is likely that the quote from the judge was an excerpt of a legal opinion, not from an interview. And my experience is that P(reporter quotes from legal opinion out of context) is quite high, which has some bearing on my belief that the judge explained elsewhere why he was applying the doctrine.