My SK on RZ had disease cloud permanently on him. And I'm quite sure it never blocked my trolls regen.
This sounds like it comes from the newb era of EQ where people believed they would stop regenerating health when they caught rabies.
Also since we know rabies in the orginal spdat did 1 point of damage, if it also blocked regen a lot of newbs would have been slowly dying from it when they got it. Instead of running around for an hour complaining about not regening HP, it would have been a death sentence they'd be frantically asking people for heals.
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