As Vicki said, they do get paid. I'm sure somebody can give finer details as they relate to Marriott, but every hotel has to pay corporate fees based on revenue. Some of those fees then go back to the hotels when rewards are redeemed. Of course the amount that is paid to the hotel depends on the Category and other factors.

And there is no incentive to give you a "bad room." If they treated customers badly, less customers would redeem or stay there resulting in less overall revenue (from customers and Marriott corporate/MR).