Well, there’s one way to find out… unless you have mold allergies.
I don’t, so I’d be prone to rubbing out one flake, sniffing it to see if I detect mold/mildew scent after rubbing it out, and then stuffing it into a clay pipe and putting fire to it. If the taste is way off, you’ll know in short order after the charring puffs. A clay is recommended because it will let you identify any sharpness or off-taste almost immediately, and also it will be easier to to purge the bowl afterward if needed.
I don’t recommend this for anybody else, especially if you have a sensitivity to mold spores. The spore issue is not a concern once the spores are incinerated, but rather the hazard comes from inhaling/ingesting them before you torch them. And again, if you have a known mold allergy, don’t even attempt it.
Nevertheless, I have smoked mildly moldy dry tobacco before (cigar and pipe). Not to say that I make a practice of it, only to say that I had no ill after effects, and I’m still standing. However, if the mold appears to be wet and active, that’s just yucky… I’ll take a loss in that case.
Some folks may cringe at the thought of doing this, to which I say, “how the hell do you you think man discovered cheese, yogurt, bread, beer, wine, and other mold/yeast derived products? Even penicillin was discovered quite by accident.”
Anaeorobic molds and yeasts have been much more of a boon to mankind than a bane.