How does the manager know that the issue was due to the wallpaper? Maybe that is right, but the manager quickly telling you this seems more CYA than factual. Granted, human nature is to hyper-notice things like a rash on the face when we have had some potential exposure, but your wife has reason for concern. This hotel handled this poorly. They should have been mortified and offered you either that night free or enough points to cover a free night at the hotel. Go to TA and warn others. Name the hotel here. You are not just warning about a potential plumbing issue that could happen anywhere but you are warning others of a hotel that does not handle accidents/mistakes/issues well.

BWT, if your wife went to a dermatologist over this the hotel should pay and they should also pay to replace the products destroyed, whether it be by water dilution or contamination by brown water. And granted, they are cheap, but the hotel needs to replace your toothbrushes if they were anywhere near that bathroom. Be it brown water or wallpaper residue it does not belong in your mouth.