I don't know what level Roger Musson had in mind for this. The components are all in Moldvay Basic and so a GM could set it up for low-level PCs. But Musson published it before Moldvay Basic came out. He would have been thinking of OD&D, I suspect (I think he was a bit of an AD&D sceptic).Its not clear if the Yellow-Mold laden stone can be investigated without disturbing/displacing it. If this is low level and the only way to discover the Yellow Mold is by displacing the ceiling stone, then that is a garbage trap. If not, then its completely legit.
You've seen me post before that I'm not really into skilled play. This is why: what initially promises to be this awesome moment of block-squished Cube and fire and yellow mould everywhere playing havoc, turns into a tedious process of levitating dwarves and everyone leaving the room and making play as procedural and (hence) uninteresting as possible!It sounds like the architecture of the ceiling is such that you should be able to investigate it without it being disturbed. Otherwise, the mold dispersal would have issues getting to the PCs due to obstruction (even measured in microns, a mold spore is large enough to get obstructed).
If the GM is doing a sufficient job depicting the room's initial conditions, answering the player's questions, honoring their Exploration Turn action resolution, AND the block can be inspected without being interacted with...then its legit. I mean, this room's general layout screams Gelatinous Cube and Yellow Mold is a common trap/foil in B/X. Spidey sense of B/X players of any kind of experience will be tingling big time.
I'm assuming this is low level, but if its 7+ Expert, then you have the Thief climb the wall/ceiling > investigate > discover the mechanism and Yellow Mold. Levitate the Dwarf (that has the Ring of Protection!) > everyone out of the room > Dwarf kills the Yellow Mold with fire > passes the ST with its beefy Death Save! Dwarf somehow fails Death Save you Neutralize Poison (I treated YM as Poison).
Or, you have the Wizard summon a Fire Elemental after its discovered and the FE kills it while everyone leaves the room!
If its low level, the Thief climbs and discovers it while everyone gets the hell out of the room (the lot in life of a Thief). If this is the only way forward, you Levitate the Dwarf and have them kill the Yellow Mold with Fire while everyone leaves the room! After you deal with the mold, throw 5 * Flaming Oil in the pit > sac a length of cloth/rope from the door to the pit > light it > GTFO and let it do its work!
(In other words: there's a reason I admire Moldvay Basic only from a distance.)