I kept the
wood chunks away from the "shell" of the pond cavity. That is, there is a vertical wall of sand / soil nearest the water all the way around. I was conscious of a slumping berm over time. There may still be unexpected settling, but I hope I can back fill and adjust if necessary. With a flexible liner, you can peel it back and re-stuff problem edges. For example, I moved the spill way fifteen feet a month ago, by re-stuffing the old lowest point along the rim thereby forcing the sheet flow to find the new lowest point more to my liking.
But I did use thin, uniform layers of fine mulch, and
biochar (from wood chips) as I layered the sand on the expanding crater even into the vertical layer of sand / soil that is free of
hugel chunks. Uniform compression (micro slumping) throughout, is not seen as a threat.
You raise an important question.