I have worked with it. It is obnoxious indeed. I had a dust collector at work that emptied its air outside the shop. That was quite useful to help with the smell. It dulls tools pretty efficiently too.
I have long legs and cannot get my steering wheel close enough to me to comfortably rest my elbow on the arm rest. Well,my motto is "A man who knows how to use a lathe and milling machine doesn't have to put up with too much crap!!!!" I made a linen impregnated steering wheel that stands off of my regular wheel about 4". Works perfectly and is removable for my little wife. Won't foul the air bag. They used the same stuff on the WWI Handley Page bomber steering wheel. Some knife makers seem to think it looks cool. Mine is dark brown,and does look cool on a steering wheel,but not on as knife handle,I think (nor does any other color of linen phenolic).
I have had this same wheel on my last few vans.
I made it from 1" thick sheet on a wood lathe at work,strictly on company time (that'll get back at them for making me get up and drive to work!!). I took a 1" end mill,and presented a flat bar of 01 to it at an upward angle in the vise. Hardened and drew it. It was a bit of a task,punctuated by having to re sharpen the chisel(I ground flat on its face to do so). I'd mounted the disc of phenolic on a plywood disc,screwed to the face plate,cutting through half of it with the disc,to correspond with the diameter of the van's wheel. I have no recollection of how I got it to perfectly register when I had to turn it over,but did so. This was all done freehand,like regular wood turning. I can't recall why I didn't use the big metal lathe. It had a vacuum hose,too,for sucking up cutting oil smoke(not the actual oil or hot chips!) Gosh !,I really had that place nailed for vacuum equipment!! I have COPD and don't want to breathe any more dust.
A ton of stinking yellow dust was made,mostly going up the 4" vac. hose. It made a wheel that looks like it was supplied by some medical supply house,or something. No one has ever questioned it during car inspections. They think it's legal,apparently,and professionally made!! Well,it WAS. I was a PAID toolmaker.
As to the question: I don't think breathing the stuff is the best idea. It just smells toxic,though I have no idea WHAT is released in smell. I think formaldehyde was used in making it. Could be wrong. Easily Googled. A sort of related plastic for eating plates and cups was made of UREA- urine and formaldehyde. HOW NICE!! We have all eaten off of it in cafeterias,I'm sure. Certainly in schools.
The wood lathe's minimum speed was 500 RPM. No doubt a slower speed,especially for that large diameter would have been helpful. I should have used the big metal lathe.