Definition of water loss is dependent on time and temperature characteristics present at the site. Category 1 and Category 2 water loss situations can become Category 3 water losses after sufficient time as defined by the IICRC S500 standard.
Mold needs moisture to grow. Mold does not grow on dry materials. Molds are microscopic fungi, a group of organisms which also includes mushrooms and yeasts. Fungi are highly adapted to grow and reproduce rapidly, producing spores and mycelia in the process.
You encounter Mold every day. Foods spoil because of mold. Leaves decay and pieces of wood lying on the ground rot due to Mold. That fuzzy black growth on wet window sills is mold. Paper or fabrics stored in a damp place get a musty smell that is due to the action of molds.