There was a problem with rot duing the World Wars and the constantly damp conditions of the wool kilts.
Point of clarification: kilts were not(and are still not) worn in combat after 1940 -- only certain units that were stationed in France during the "Phoney War" period of 1939-1940 wore them, such as the Cameron Highlanders. After 1940, the Scottish Regiments went to the wool battle-dress (BD). Some Scots in the Commandos wore kilts, but the Camerons are listed as the last regiment to wear them into battle.

Rot, trench-foot, etc. was a problem for all soldiers in the First World War, and not just the Highland Regiments.

Wool also is a very practical military garment because of its durability and insulation.

Cheers,

T.