My experience, in Magic Farm:
Tainted Lands (the biome) has spread turned off, but can still spread if a node is affected or tainted sheep graze on grass.
Fibrous Taint (the surface cover block) spreads "like" grass, but will only spread to blocks in Tainted Lands. It will spread to cover any solid block.
Be aware that "Fibrous Taint" is actually in the NEXT block -- while it may appear to be on top of, or on the side of, or underneath block X, it is actually in the air next to it -- so it may seem to spread one block farther than you think grass should spread.
Finally, "Invisible" fiber can exist in the air, typically at an inside corner, one block too high. It can still spread from there, so even if you think you have all the fiber out of an area, it might come back. If you see this happen, take another look around.
If you rely on ground color to tell you where the edge of the tainted lands are, be aware that fiber can live one block farther away from "purple" than you might think ... yeah.
Fiber can be spread from (at least): Fiber, tainted soil, tainted grass, tainted plants. Crusted Fiber, spores, taintacles, I don't know for certain.