I do this also...not exactly covering the soil but in rings around certain plants and fruit trees...no problem that I have noticed. i really like the idea, we just don't have enough rotted wood handy to do it with. Our spent shiitakes logs are slowly making their way in as 'mulch' and buried wood. We don't have and never have had a chipper so I've nothing to compare.
"We're all just walking each other home." -Ram Dass
"Be a lamp, or a lifeboat, or a ladder."-Rumi
When the opportunity presents itself, I do. For instance, my neighbor decided it was time for a 15' tall snag to come down before it fell across his driveway. I gladly pitched in with the labor on this task to make sure that the carcass would be dragged over to the fence on my side, where I could break it down further at my leisure.
The problem I see is getting it when it is "just right". In my version of the Goldilocks story, she is traipsing through the woods, looking for something to mulch her garden with. The termite infested oak branch which crumbles to sawdust when you pick it up is "too soft". The branch that fell in last week's windstorm is "too hard". But the old log that the bess beetles have been working on, the one that easily fills your shovel with crumbly material when you jab at it is "just right".
Another way to tell is the amount of lizard activity around the log. If the 5-lined skinks are quite active dashing in and out of the log, the inside is quite crumbly, because that is where they like to lay their eggs. When the neighbor's tree came down, there were some skinks that were unhappy that they were being evicted. I think they have gotten over it, for the number living under my back deck seems to be increasing.