The Fallout series are far from realistic, so if we want to look at psychological reasons why raiders, supermutants or ferals behave as they do, I think the most likely, although boring reason, is as simple as "here's some evil things you get to kill" with no deeper meaning. It's part of the Fallout setting to go from deeply immersive and psychological one moment, to shallow shoot-'em-up with excessive violence the other moment.
Ignoring that, there are some possible explanations:
Might explain it at some extent, as mentioned in another answer. Raiders across the wasteland are definitely fond of drugs. However, the psycho drug is just one of many.
I'm not so sure if grotesque decorations are necessarily there for scaring off unwanted visitors. Sure, it might scare off burglars and scavengers, but it might as well attract dangerous wildlife: various insects, yao guai bears, supermutants, deathclaws. To decorate your shed with unburied corpses rather seems like a big risk.
As always in Fallout, radiation is to blame for a lot of bad things. We have the Children of Atom, who are religious fanatics and often quite insane, which is at least partially explained by their repeated exposure to severe radiation. They are occasionally using grotesque decorations like skulls and corpses. And in Fallout 4 - Far Harbor, there are raider-like groups called Trappers who have been driven insane by radioactive fog.
So the in-game lore repeatedly tells you that exposure to too much radiation might make you lose your mind. Or grow an extra head for that matter. Not very realistic, but makes a whole lot of sense from a Fallout lore perspective. Radiation is everywhere.
The Fallout 4 Nuka World DLC provides a lot of insights in raider mentality. Here you end up close to three very different raider groups: The Disciples, The Operators and The Pack. They are more powerful compared to the average raider groups you typically come across. In a way, these three groups represent different aspect of raider mentality.
The Disciples fit the typical psychopath cliche: fond of torture, knives, blood and gore, with the typical grotesque raider decorations. The game doesn't mention why they are a bunch of psychopaths, just that they are. And because of it, they are feared and well-known.
Raiders definitely have a kind of sub-culture. To be a good raider, you should kill without hesitation, be dangerous and strong, approve of violence and fighting, be greedy, be fond of drugs and booze etc. Embracing these twisted ideals gives status and fame among raiders. Which in turn could help raider groups when recruiting or bullying settlements into paying them.
So grotesque decorations might just be a way to show that you are dangerous and live up to the raider ideal.