These support the theory:
- Face and all else of his body is covered (to hide his clowny appearance?)
- Seems thin and agile, suggesting he has the same build as the Joker
- Seems to know a lot about crime and criminals. Also knows there have been several people to use the Red Hood identity.
- Wears "outdated" and theatrical clothes; top hat, white gloves and red circular glasses
- Wears dark clothes in contrast to his colourful, flamboyant style. Could be part of the joke or to symbolize his change.
- All these suggest he is "being Batman" in the absence of his "frenemy", without his opposite, he is nothing - as he has stated numerous times. This could either be his way of coping with the loss or making a grand joke out of his former self. Or he could have legitimely become sane or harmless as he did in Going Sane and TDK, for example.
- The Gravediggers (or Clowns) are recurring jester characters in Shakespearean literature. The Gravedigger is the alias Sexton uses.
- He is mentioned as having been scarred by criminals who killed his wife. The Killing Joke origin is pretty much the same story.
Against the theory:
- Becoming a vigilante isn't exactly comparable to sanity. This would suggest he is either someone else or Joker is just doing this to later cause more chaos.
- If he really is convinced Batman is dead, there is no reason he would continue in these circles. It's more likely he would have gotten his appearance fixed and started over as a law-abiding citizen.
- The clues are a bit too obvious, suggesting a red herring.
- There are several other missing or mysterious characters who might be Sexton too. Riddler, for example.