Hi Dan,
You can buy long fiber and chop it up and remove the rough out of it. The old saying " No sticks, no stems, no seeds, long fiber sphagnum is bada$$ weed" or something like that
The easier way to address this is to simply use milled sphagnum. The work has been done for you and in my opinion more economical when you take all things into consideration.
Anti-septic properties yes. Anti-microbial? I can't comment since I have never heard or read that prior to this. As far growth rates? Every single one of my trees once sphagnum was introduced took off. Especially my Junipers which absolutely love it. In fact we use it in our planting mix for field grown trees. It eases shock and keeps the nasties away. We dress the root ball lightly with it before sticking it in the ground. By the way, we use it as a applicator when mycorrizhae is applied to roots. The mycorrizhae doesn't get washed out when the hose gets turned on. So I would say that if there was any credence to anti-microbial properties, this example shot it down.
Yes, sphagnum is acidic. That is what makes it anti-septic. I have yet to experience any problems with alkaline soil trees. If I did I would amend for the correct PH.
"I heard that the moss continues to grow within the bonsai soil." This is true depending on the type of sphagnum, or should I say the way its prepared and packaged. There is live collected sphagnum. This type is the best of all and will, if kept moist and out of direct light continue to grow. The New Zealand Angel Moss that we carry looks dead in the package but will pop back to life once hydrated. The compressed bricks seem to have a better yield than the bales we receive for our soil blends. Then there is the long fiber that
is dead. Sometimes this sphagnum will take on a dark greenish hue. This is an algae that is present in non-milled sphagnum when collected. So don't be fooled by its color. It is darker and kinda slimy.
So thats my opinion based on the last eight years or so of playing around with sphagnum in the mid-atlantic region. I would suggest that you try a tree or two and see if it pleases you. Hope this helped.