We still don't really know that much about how the bacteria on and in live rock do their work on the nitrogen cycle.
Many believe that the bacteria populate the porous inner structure of the rock. However, a simple diffusion analysis reveals that with diffusion, you can't get enough water in and out of the rock to adequately filter the surrounding volume. Shimek has proposed that small worms and rock-boring critters are adding to the water transport through the rock, but there are a number of very smart people who have substantial problems with this theory based on the possible volume of water exchanged.
A second theory of live rock filtration is that the nitrifying/denitrifying bacteria are largely located on the rough surface of the rock in thin films. Even if you handle the rock, you're only rubbing the films off of the high points of the rough surface, and the film is quickly re-established when the rock is put back in your tank water.
Still a third variety of explanation on how live rock works is that algae and bacteria on the rock are working together to complete the nitrogen cycle and that there is a relatively shallow "skin" of active rock in which active transport of nutrients between the surface and subsurface participants allows for ideal environments (anoxic regions, etc.) to be maintained within the rock.
Your question is a good one, but for now, the only answer is "we don't know". Corraline algae does appear to plate over the structure it's growing on, but has anyone done an analysis of how much water can diffuse through corraline algae? Perhaps it's more porous than we thought? Perhaps it isn't, but perhaps corraline algae harbors thin films of commensal or mutual bacterial/algae populations on it's surface... Or perhaps you'll come up with an even better explanation than I've been able to throw out there.
Regards,
Ross