When you ebonize wood, you are working with the tanins that naturally
occur in wood. I doubt it's any more or less harmful than the wood was
to begin with.

FYI, the steel wool is a help with wood with fewer tanins like maple,
oak will ebonize without it. I'd love to see a pic of the finished
product, I've not yet gotten around to ebonizing. I do have a really
bad article on it here somewhere.