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Once again, contact with moisture is the culprit here, though water-resistant varieties of wallpaper are less likely to become wet and develop mold. Using a high-quality exhaust fan or dehumidifier and leaving the doors or windows cracked after bathing will keep this issue at bay. 

Yes, you can apply peel-and-stick wallpaper over wood paneling, but it requires significant preparation for a good result. Peel-and-stick wallpaper has a weaker adhesive than traditional wallpaper and works best on smooth, non-textured surfaces like painted or primed drywall. Because wood paneling is often textured with grooves, any flaws in the underlying surface will likely be visible after application. To prepare the paneling, you must ensure the surface is free of cracks, holes, and protrusions by filling any indentations and sanding rough spots to create a smooth surface. An alternative is to remove the paneling and apply the wallpaper directly to the underlying drywall or plaster, provided it is in good condition.

To layer wallpaper over wallpaper, inspect your existing wallpaper for problem areas. Damaged wallpaper should not be covered. If it’s okay to proceed, prep by turning off the electricity and removing any outlet and switch covers. Dust your walls and lightly rinse them to prevent the existing paper from peeling. Apply primer, then apply your new wallpaper.

If you prefer peel-and-stick to traditional wallpaper, you can skip the priming process. Many manufacturers don't require an additional primer if you’re installing peel-and-stick wallpaper to painted walls. However, if you’re applying peel-and-stick wallpaper to unfinished drywall, you’ll need to apply a primer first.