chips from stump of diseased dutch elm
The wood is usable. We used to suggest that fresh wood chips needed to be aged for more than 6 months before use, but it can be used in non-plant areas immediately.
If it is fresh and you are using around plants, it should not be incorporated into the soil and should not be any more than 2-3 inches deep and not in contact with the plant stems or trunks.
The disease issue is not of concern. That disease is vectored/spread by bark beetles which do not live in wood chips.