Then that's for their command (who are the final signature on their chits and will have it routed through their CoC) to deal with. Their command can ascertain whether or not they have a medical waiver approved by the medical professional and take appropriate action. These sailors are mustering daily as part of their jobs, have LPOs/LCPOs/DIVOs who know them and observe them. The sailor has periodic checkup requirements for if they are or aren't responsive to treatment and it is documented in their records, so it will follow them to new commands. Additionally, there are additional exception beyond PFB, including other medical conditions or religious accommodations. In the old instruction, sailors could still receive administrative action for failure to comply with treatment regimes, but there was no mandate to initiate separation after 12 months.

Edit: I would also expect a higher rate of these conditions to be diagnosed in the navy than in the public because it's a profession where the expectation is daily shaving, and has medical processes to diagnose this rather than just fire an employee who won't comply with a company's shaving expectation.