Peculiar Nine News footage showed a woman being chaperoned by a PPE-clad health worker from the Holiday Inn on Flinders Lane with the bag pulled over her head on Tuesday morning.
Thirty-one guests had to be moved due to water damage to four floors caused by wrongly activated sprinklers.
Thirteen of the guests have been diagnosed with Covid-19, while 18 are displaying symptoms
Premier Daniel Andrews insisted the people being moved had been supplied with sufficient protection prior to being transported – a surgical mask and hand sanitiser.
He clarified the wearing of garbage bags was not part of the health recommendation, and individuals had chosen to don the opaque coverings to protect their identities.