Natural bum balms, coconut oil etc. all completely wash out from the nappy. But creams that contain petroleum, and often zinc, do not wash out of the fabric. Instead they tend to cause a residue build-up in the cloth which 'clogs' the nappy fibers to such a degree that they are no longer absorbent. It is almost impossible to undo the damage that bum cream residue does to a cloth nappy - it essentially breaks the nappy - permanently. Using non cloth-safe bum creams are one of the few ways to really damage a cloth nappy.
With that in mind, always use a cloth-safe balm when there is a little redness or teething rash.
When there is a specific need to use a certain non-cloth safe medicating cream - always use the cream sparingly, and only apply the cream if you are using disposable liners. (Washable fleece liners cannot be used since the cream will also quickly clog up the fleece liner, preventing the liquid from passing through it, and resulting in the liquid simply running off the sides and usually straight out at the legs).