To much iron can throw off the ph balance of your soil. It would take alot to do that tho
It can make yellow spots, burn the lawn, stunt the growth of the turf, promote growth of weeds, attract insects.
It's fine if you don't use to much. My organic fertilizer I offer has 5% iron in a 50lb bag. The level is 12-7-10 I put 5 pounds down per 1000sqft every 5 months these lawns always look good.