Paul,
As you know the spalting is caused by a fungus. In all the articles I have ever read, they always recommend wearing a respirator while turning it. I personally prefer not to use spalted woods for utility purpose items. If I were to use it for say a salad bowl, I'd at least put something that truly seals the wood. Ex: Polyurethane, Salad bowl finish. In the past when ever I did sell or give away a spalted piece, I would at least tell the recipient what caused the spalting. I would also mention how it can cause respiratory issues for the woodworker, yet there was no proof to be found on it's safeness with being used with food. I also read somewhere that Richard Raffan no longer turns it. It's really up to you on this one.