I am not a biologist, but the way I understand it working is that the terrestrial grass and weeds will be covered by water, then when they die and decay, their nutrients will be released into the water where micro-organisms will feed on them... the food chain works from the bottom up, so as those micro-organisms are then eaten by larger critters, which eventually results in larger prey being eaten by our favorite green fish.

So no, they aren't going to be toxic, but rather they will be of benefit to the ecosystem once the water comes back up... This phenomenon is pretty common. New reservoirs that were flooded in the recent past have higher levels of phytoplankton and nutrients in their water, which can result in some fantastic fishing.

I have always heard that it is a good thing for a lake. When it fills back up it called the "new lake" affect which will result in a great spawn the next season and in turn causes a boom in the fish population in the future.