It would spread between hearthlings through sharing of beds, hats, and other headwear.
Would debuff will, as you fall into desperation due to the terrible itch.
To treat it you could maybe rub different kinds of ointments to the head and comb regularly.
A fun little addition I'd say. It will add depth to the game and increase meaningfulness of player interactions.
Just imagine a village circulating lice around, very nice event. Much fun.