You are correct. The peroxide will, when added to melted beeswax, essentially oxidize any organic matter, pollen, propolis, other matter, leaving only wax. The problem is: the odor also goes. The wax is lighter colored, but is it still beeswax?
[Editor: In general beeswax is not toxic. Dyes generally do their job in extremely minute quantities--note on packaging where the ingredients are listed, colouring agents are one of the last things listed because there is very little--so it is very unlikely they would be toxic. How would the toxin get into the person anyway? Not likely through physical contact. If you think the air in which the candle is burning might become toxic, it's very unlikely because there would not be very much left after the dye is burned to poison anyone.]
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