My understanding is that it's just a sponge made from a weirdly grippy plastic. It doesn't have any soap or solvent or anything in the sponge. The plastic itself could be harmful if you ingest it, and (as these sites warn) it is dangerous to eat or inhale a sponge in any case.
That doesn't mean that it is giving off vapors or leaving chemicals on the surfaces you clean.
|it disintegrates after a lot of use
So does an ordinary sponge.
About CarrieMF's link: Just because there's a bunch of information there doesn't mean the product is dangerous. Notice that the only hazards listed are from eating the sponge, grinding it into dust that you inhale, or getting particles into your skin if you happen to be sensitive to it. Notice that it received a hazard score of 0 in every category except flammability, where it received a 1. I bet it's less flammable than a cotton dishcloth.
|kinda like the traces of mercury in vaccines is safe
No, when mercury is used in vaccines it's a preservative that is left in there. This is more like the possibility that the broken tip of a sewing needle is lodged in your cloth diaper. Formaldehyde is used in making the sponge but is not supposed to be present in the finished product, like pointy metal needles are used to make diapers but are not supposed to be present in the finished product--but accidents can happen.
I'm not concerned about the Magic Sponge being directly harmful in normal use; I'm concerned that it's nasty to manufacture, it's not biodegradable, and it's expensive. It works in situations where nothing else does, so those are the only situations in which I use it. I still have the same 2-pack I bought 4 years ago. I wouldn't recommend it for everyday cleaning.