ToME: the Tales of Maj'Eyal

I haven't unlocked any undead 'race' yet, but I found a very nice mummy armor that gives 100% disease and poison immunity in addition to other good stats.

Problem is, upon wearing it, I am considered undead and my regeneration infusion does not work.

Is this just the tradeoff I have to accept or is there a way around it?

Infusions do not work if you are undead. This includes Regeneration, Healing, Movement, Heroism, Wild, and all the special ones. You can still be healed with any kind of healing spell, such as Bathe In Light or Healing Light.

If you really want to use this belt and it's endgame piece of equipment, look into Shielding Runes. They can act as a pseudo heal, giving you more HP for the moment. Also consider stacking your natural HP regen high, since that still works just fine.

Basically, you've got to accept it. Being undead means no Infusions and no Wild-Gift talents.