I think your translation is close. But we can describe it in detail. From your comment,
The sentence was from a short novel, about the intrigue between schoolmates to get rid of each other. In short, the person mentioned in the sentence took the risk. I was just a bit confused since the word can also be translated as "losing one's mind"
From their judgement, You might be guessing the outcome could be going towards wrong direction and you might feel as if one is
losing his/her mind. But the expression 「思い切った」focuses on "distinct and unexpected" decision by him/her rather than his/her behavior. Now, I have applied it to the situation you described.
So, the schoolmates secretly having scheme in order not to be annoyed by the opponent. Probably one dobs the opponent in about his/her pranks to the teacher who teaches the subject which the opponent is not good at in order that the opponent is called on at class and being humiliated by not answering the teacher's question.
But this time, the one having been dobbed in as usual is retaliating immediately to the rival regardless of considering the chance of getting further revenge from the rival.
From other people observing, the one doing so was unexpected. So they are commenting like「あいつ にしちゃ 思い切った な。」: "It is bold/daring and unhesitant for him/her to do so."