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I'd strongly recommend a shower tray over titting around with wet-room tiling. Our "wet-room" floor failed because the ply that it was laid on was not thick/stiff enough. It flexed under the weight of anyone using it, which cracked the grout, which allowed water through, which rotted the ply (despite tanking). After I ripped that all out I "sistered"some level extra joists to the existing (slant-cut) ones, added loads of noggins and then re-boarded the floor with marine ply, which I painted with tanking paint before putting down the cement base for a shower tray.
The only pain was attaching the new drain, since I had no access underneath. I just had to set up the drain really carefully and pull it up as I screwed the top collar into it. The wall tiling was mostly sound, but where the walls needed sorting I used cement board (take not of the instructions as it can be nasty when you cut it). If I needed to do the walls I'd definitely use panels instead of tiling. In general, the fewer joints the better.
Rip it all out (see photo above)!
The joists are watermarked but seem solid - the rot seems to have been exclusively in the additional timber at the front, apart from the mouldy patch of ply bottom left - not sure whether to leave, treat or cut out.
I’ve had a board (bog standard chipboard) up and underneath has some weird black dust/mold on the plasterboard below but that seems to be the extent of it.