In British English, 'disabled toilet' is the standard expression to refer to a cubicle with a toilet - restroom in US English - for people who have disabilities. A disabled toilet has to be large enough to accommodate a wheelchair. It has handrails, and all the facilities, for hand-washing and so on, are accessible from a seated position. Sometimes the toilet itself - height, seat, flushing control - is also specially adapted for users with a disability. I would not assume that 'disabled toilet' meant that it was out of order, unless the sign had been written by a non-native who was unfamiliar with the usual meaning of the phrase. To 'disable', when referring to a mechanism, means to deliberately render non-functioning. For example, a burglar might disable an alarm by pulling its wires out, so that it wouldn't sound. This doesn't really make sense in the context of a sign on a toilet.

It is a toilet for a disabled person. Typically there will be hand rails that they can use to assist them in and out of a wheelchair. If you need any more help feel free to ask.

Without context, it could mean either, however, I believe it is most likely British English for what we Americans would call the “handicapped restroom.” I could be wrong -- I believe that in most public places, all restrooms are equipped for persons with disabilities, and the sign usual features a pictogram, so it’s not usual to use the actual words at all. Note that with this interpretation, the main stress would fall on the first word — this is typical in such reduced prepositional phrases (reduced from “toilet for the disabled”). Under the other interpretation, where “disabled” would be just a normal adjective describing a toilet that has been somehow deactivated, the main stress would fall on “toilet.”

Literarillyit means that the toilet functions as such anymore, maybe because of reparations or because it has been cancelled or not operating because of damages, lack of supplies (i.e. water, seats, etc.) or other reasons.