Wow! That's exciting! What I like about this idea is it has very little downside--cost of a bucket and batting, and maybe a little lint in the pool. It's not actually capable of harming your pool.

I have an idea: If the bucket with the holes and batting are small enough, before you pull it out of the water, immerse it in a bigger bucket or small plastic garbage pail, then pull them both out. That way the brown iron impregnated water will flow into the outer bucket and not back into the pool.