Hi James.
Sorry i missed your pM so heres my experiences.
Quite a few years back I ran one of my DSB's with caulerpa (lit 24/7) for approximately 4-5 years. My current DSB has been running in the dark for the last 3-4 years with Chaeto in a seperate area thats reverse lit 12hrs.
The downsides to running algae in a DSB are two fold ime over the long term.
1. Any rooting algaes gradually clog the substrate up over time, binding it together reducing diffusion, and limiting the burrowing capacity of any fauna present. After 4 years, i found my entire DSB top layer was basically a solid mass of sand and roots with plenty of surface life, but not alot of burrowing going on...The algae was doing great, but the sand bed was gradually suffocating once you got beyond the 2" boundry layer. so on that basis id say, that if you want to combine sand with algae such as Caulerpa (im not including seagrasses here) then id say, stick to 2"...any deeper and its a waste of time ime.
2. Algae placed above the substrate can act like a filter, trapping waste over time to the degree that a good proportion of your critter population moves up out of the sand into the algae to get at the food source. Ive seen a few cases where its been such an extensive migration, that the sand bed becomes basically barren. Obviously here, there are changes you can make, ie only allowing algae to cover half of the substrate at any one time, whilst leaving the other half exposed to let incoming waste settle out somewhat, to provide a local food source thats easily accessible at sand level.
Light V Dark.
I'll deffinately confrm from my observations that dark beds do better than lit ones as far as critter action goes and overal bed health. imo this is due to the fact that the critters (especially larger ones such as bristle worms etc) are far happyer coming out under the cover of darkness than they are in lit conditions, so a dark bed generally gets a more consistant level of disturbance and scavenging than one thats lit either part or all of the time.
If you have the facility /space to seperate out the two areas, then id say it can offer better results.
If not, then dont panic. as long as you understand the pros and cons then you can allways make adjustments later on to keep things on track (stripping out 50% of the sand bed and algae encroachment every two years and replacing it with new that will seed from the remainder), or keeping the sand bed to 2" and settling more for a shallow sand bed/algae type refugium, rather than a true DSB / algae combo.
I dont think iether method is wrong. Both have and do work very well.
regards