The bubbles are formed as part of the chemical reactions:
2H2O2 --> 2H2O + O2
Ideally we want: H2O2 + (organic chemical) --> (organic)-OH + (chemical)-OH, that is the destruction of the fatty acids, protein and DNA of the organism but once in the presence of Fe2+ and Cu2+ the first reaction predominates which is what gives all the bubbles (or O2). The bubbles form because the H2O2 destroys the cell membrane and allows access to the Fe in the cell. If you see bubbles is because the algae is roasted

Mwhahaha!
It was quite a spectacular show. The bubbles persisted for more than an hour (probably more as I switched the tank light off to go to bed). The pygmy swords are not looking wonderfully happy right now but they are still alive. No sign of clado and the sand substrate looks so clean.

The effective ingredient in the Excel is glutaraldehyde. This is formaldehyde's big brother and we use it in the lab when we want something fixed good and proper. It is the last thing I would put into my fishtank.