If time was truly frozen, how could it be possible for mildew to grow?
If time was truly completely frozen, how could they breathe or even move if the air particles were frozen? Therefore, we must assume that more than just Rick, Morty, and Summer were unfrozen; a protective radius around them during the initial time freeze would have also affected the surrounding air for some short range.
Depending on the radius surrounding the trio of humans unaffected by stopped time, it's possible nee probable that floating mold and bacteria were also within the initial "unfrozen" vicinity. As Jerry was frozen so close in proximity to where the trio was unfrozen, an errant mote of never-frozen mildew could have landed on Jerry and grown there over time.
We know from the last episode of Season 1 that the trio stayed frozen for a significant amount of (relative) time. Also in the same episode, we see the kids place cut pumpkins over the heads of their parents. We learn in the first episode of Season 2 that they were unfrozen long enough to lose stability with time itself. The length of time spent with the universe frozen combined with pumpkin exposure could have helped enable the growth of any mildew on Jerry.