If you read the pdf, you will see it was not my project. I would agree that the joint should not be glassed over. The joint needs to move some. But the use of 5200 would work fine for the joint. I would also not use bytul for bedding the toe rail. The diagram was to show how Bristol made the hull to deck connection and mounted the toe. Not condoning how this person did his repair.
But as far as I know, this work has held up just fine.
I did not mean to imply that this was your project. What concerns me is that methods described in that monograph seemed like a pretty poor way to do this. My reason for commenting is that someone else might think that this sounds like a good way to go. This all may sound like nitpicking, but when you think about the cost to do this and the time involved, it seems like a waste to not make better choices of materials and methods.
More specifically, I am not sure that I would say that the hull to deck joint should not be glassed over, but if it is, there should be enough layers of cloth to create a watertight and structural connection. Making the choice to glass the joint over is made worse by the decision to only apply a single layer of cloth and by using polyester resin which tends to form a weaker bond than epoxy. As you noted this becomes more critical since the fabric bridges a joint which inherently flexes.
Adding to the problem and maybe more critically, depending on the year of this boat, Bristol bed its toe rails in polysulfide caulk, which tends to leech into the gelcoat over time making a bond to the gelcoat less reliable as well. Lastly, the single layup of fiberglass cloth is likely not to be totally filled with resin sufficiently that it will be water tight where it crosses the abandoned fastening holes.
While 5200 makes a good adhesive and reasonably good caulk, smeared into the joint, and bolt holes, it is not all that likely to act as a particularly effective sealant.
I actually like the idea of using butyl to bed the toerail, especially to a plastic material that is likely to expand linearly with temperature. Butyl seems to tolerate movement and reseals itself as long as dirt does not get into the joint. But in using butyl the holes should have a tapered countersink at the bolts where they pass into the fiberglass.
I would also be concerned about using bolts with finishing washers since they tend to funnel water into the bolt hole where the water can freeze and thaw.