I have not not seen this before. I agree with Rocknrolf ideas with tape.

Alternatively - You could also tape the sides, add a few layers of Tru-oil (or ??) to the spalted top, then stain the sides and back, then tru-oil sides and back. If the spalted top is coated in finish it should stop the chances of stain getting onto it.

Other suggestions:
Create a fake binding look by taping a strip along the side of the body. I think someone else created a fake binding by routing a round edge between the side and top (or back).