Gas regulators have to have a breather hole to allow the regulator to compensate for changes in the barometric air pressure. The air hole is usually positioned so that rain will not naturally fall into it. However that is not the only way water can get inside. Regulators are designed to prevent high pressure gas from getting into the installation pipe work, so part of their action is to allow the high pressure gas to expand inside the regulator.
Expanding gas needs heat energy and it get that from the regulator body in just the same way as the gas cylinder does to enable the liquefied gas to vapourise, so the gas expansion will actually cool the regulator slightly diaphragm chamber , and that change in temperature given the right conditions could cause warm moist air to be drawn into the ambient air side of the regulator where it comes into contact with diaphragm which has cooler gas on the other side and any reduce the temperature of air in the chamber which could cause condensation to form.
If teh regulator is incorrectly orientated, and If sufficient water is collected, and the ambient temperature drops to about freezing, the cooling effect of the expanding gas might cause the layed down condensation to freeze, and prevent the diaphragm for properly responding to control the gas out flow pressure.
The incidence of this is low becasue gas regulators should have air side below the diaphragm should be orientated above the air space, so moisture will collect and hopefully be expelled through the breather hole, but where the regulator has not been correctly orientated there have been a few cases where the formation of ice has compromised the operation of the diaphragm and regulator.