I am no expert, but logic tells me that the heating of the wood with the steam would kill off any insects living in the wood, however this would not be a life long solution, once the water has evaporated out the wood, it would be open for contamination again.
An interesting off shoot of the wood steaming, is that the wood becomes malleable and moulded into shapes which you could not do when in its dry state. During the cooling and drying period, you must maintain the shape you wish the would to remain in.
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