White vinegar. I appreciate your concerns. Be sure to wash any material you dye after it is done cooking since there will be residual dye on it. I use white paper towels for this step. Once the residual dye is off however there is NO bleeding and the color will stay fast.
Kool-aid is actually an acid dye with flavor added. You get more fade from premium fly tying materials than this stuff, and there is zero harmful products associated with it other than hot water.
Plenty of information on the internet. I was blown away by how easy and high quality the end result turned out.
I have been tying a lot of Salmon and Steelhead flys the last few years. This dying has been a revelation for my tying materials. I can buy much more high quality white or natural materials at a greatly reduced price and dye them to my specifications.