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Folau, who was sacked for anti-gay comments made on social media this year, is now demanding $14 million in damages from Rugby Australia, claiming he could have been Wallabies skipper.
The cross-code star lodged an updated statement of claim in the Federal Court, where he's increasing his demands from $10 million to $14 million.
Former Wallaby and rugby writer FitzSimons slammed Folau's latest claims and his "worrying" beliefs about gay marriage and bushfires.
"It just gets ever more absurd," FitzSimons told TVNZ.
"From a distance, I just thought, 'What? Captain?'... but Michael Cheika, who was the Wallabies coach of course, he moved through seven vice captains.
"Now, if Michael Cheika had seven vice captains and Israel Folau wasn't one of them, I think by definition he was a very unlikely man to be captain."
FitzSimons said he told a current Wallaby, who he didn't name, about Folau's captaincy claim and the player "burst into laughter".
"The last time Australian rugby had a fullback as captain was in 1980. It was Paul McLean, it was one test, and after that the theory in Australian rugby was that fullback was too far from the main game to be the captain, so the tradition in Australian rugby is we don't have a fullback as a captain.
"I find the claim absolutely absurd."
Folau also returned to headlines recently for claiming that Australia's bushfires, which killed six people, were a result of legalising same-sex marriage and abortion, which FitzSimons said was "worrying".
"It doesn't have the closest grip on reality and I worry about that kind of stuff.
"If he actually believes that, then I respectfully submit his remaining friends need to sit him down, give him a hug and say, 'C'mon mate, we've got to get you some help here. This is not real.'"
Folau said his contract termination will cost him $4.2 million from 2019-2022, as well as $300,000 in match payments from 2019-2021.
He also claims he stood to make up to $1.5 million a season with an overseas club for two-to-three years when his contract with RA was up.
Lost sponsorship dollars, and the missed revenue of competing at World Cups and possibly captaining the national team were also used to justify the controversial star's new $14 million demand.