I don't have answers on allowable depth, but I suspect it would never be used on a scale that becomes significant to the local ecology. Even tonnes and tonnes of Phoslock are nothing compared to the amount of sediment already resting on a lake bed.
Phoslock is a remedial product. It's not supposed to allow you to continue to pump phosphates into a waterway with impunity knowing you can Phoslock your way out of the damage indefinitely. It's fixes the eutrophication while you sort out the issues that caused it. I think you have a point about what would happen if you overloaded a system with it, but if you're putting that much Phoslock in in the first place you've got much, much bigger problems.
In terms of what happens when a fish eats it, the same thing that happens when a fish eats any other inert mineral on the bottom of a waterway. The product has been demonstrated to be non-toxic to fish and safe for use in human drinking water supplies.
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