Lan Sect would ban anything that could be considered fun if they could get away with it. Actually, it may be in one of the 3000 rules: no fun! But uh Lan Zhan can get most of the credit, I was gone for many years.
In my experience, it is much harder to possess the powerful, but sometimes there are evil spirits who take that as a challenge. I have seen great cultivators succumb to possession. I mostly try to just help those that cannot help themselves, against spirits and demons and evil that would hurt them.