I've not come across any mention of this species being toxic Within that raised grey-blue ball all you find is a mass of what looks like cotton wool that holds a great multitude of powdery spores. If the ball is compressed, spores puff out through a mouth at the top of that pleated cone. I'd imagine that someone with breathing difficulties (e.g. an asthmatic) might suffer if they breathed in lots of powdery spores, not because of an inherent toxicity, but simply because of a physical obstruction to airflow. This is not a rare species in the Canberra area but, despite the fact that it looks quite striking in this photo, it is easy to overlook if it appears in thick mulch or plant litter. You may see only a few at a time but occasionally large colonies appear.
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