'Faulty' just means that there is some bug in the content's config file that is causing issues that prevents it from working properly in Trainz (usually the content creator put an extra space or character where it shouldn't be accidentally). Bascially, the content is broken and needs to be fixed. It doesn't mean it's infected with malware or a virus.
However, like all computer files Trainz content can be infected with viruses or malware, especially if you've downloaded it from a third-party site, although content on the DLS would be extremely safe due to N3V's strict scanning of uploaded content, there is always that remote risk it could still be infected (this is why the 'White Pages' have a disclaimer about viruses and malware), so you download at your own risk, no matter how remote.
Content Manager cannot detect that sort of thing though, as that is not what it is designed for; only antivirus or antimalware software can.