I've never used it to mulch plants but have used it in paths... it gets moldy, plus I almost slipped & broke my neck! Plus the normal precautions, not dog-friendly...

It gets moldy when applied at more than a 4" depth. Use a gravel rake and bring the lower parts up to the air so they can dry.

Is mold bad for the garden? Will it create fungus problems? Should I remove it?

It's quite natural, it's a part of decomposition. Cocoa hulls are a vegetative manufacturing product, they are not rocks which just sit there.

I don't think I've read anything bad about the decomp, you have to do some research to find out for sure, but it is certainly unattractive. If you rake the mulch to bring the wettest areas to the surface so they can dry you will be fine.

My sister uses cocoa mulch in her ornamental gardens and she does lay it down thickly with soaker hoses underneath. Yes it does go a bit moldy but that doesn't last forever. And as she's not walking on it barefoot it doesn't gross her out. And her gardens are lush and gorgeous without having to feed them...the cocoa bean mulch does slowly break down and she adds a few inches every year.

There are a lot of pros and cons to it...I think it smells nice for a while and it is a very pretty mulch, but if you lay it thickly you need to turn it, and eventually it must be replaced. Cocoa bean mulch is one of the more expensive mulches and unless you have a small garden the cost can be limiting.

Personally, I am notorious for being cheap in the garden, I mulch with fresh grass clippings put down about maybe three or four inches deep. At that depth the clippings don't slime and stink, I do have to put more throughout the season because they break down fast, but I use my own and so they're free.

Warning!!! Cocoa mulch is poisonous to dogs, and it smells like chocolate, so they love to eat it! Don't use it if any dogs can get to it.
Carla in Sac