Yes it can absolutely grow on racked buds.
One time I wet trimmed some plants and one of the top buds was a little bleached out looking from being close to the lights,I didnt see any rot though but when I looked the next day some fuzzy gray mold had grown on it and spread to some surrounding buds. I threw all the tainted ones out and spread out the buds better.
So yes it can spread especially if the buds arent spread out enough. But yeah that shit is nasty, you should throw away any of them that have any rot.