The Hotel's rules (through the contracts the masters signed over the centuries) are a mess of makeshift things piled up on top of each other. When it comes to this point in particular, previous masters made it so that most (but not all) life could not reproduce above the cliff wall. That's why, very specifically and since the first build, we make a point of saying that there was no fungi/mold in the hotel when the player arrived. This doesn't affect beneficial gut bacteria, FYI.
That is to say, if someone has an infection when they reach the hotel it'll stop multiplying in them and recede. Some conditions may be cured by this, while others would only go into remission.