Rubber mulch does decay, and the bacteria that break it down also release the toxic chemicals found in the rubber into the ecosystem.
The toxic chemicals in the tires kill beneficial predatory insects that would normally control pests. It also kills beneficial microbes that prevent disease and kill harmful insects.
Most users have found that when it grows hot, rubber mulch emits a strong stench. Toxic gasses are released such as VOC's and PAH's that not only irritate nasal and respiratory passages, but have been found to cause such maladies as central nervous system damage, dermatitis, depression, kidney damage, headaches, eye damage, dizziness and nausea. Ground rubber products should never be used in enclosed areas, or indoors.
Mold is regularly found on tires used in the construction of boat docks and piers, as well as those used as planters. Mold and mildew with grow on almost any moist surface that isn't toxic enough to kill them.
Water will run through the recycled rubber mulch, but the chemicals it carries with it kill everything beneficial underneath it. Earthworms cannot survive without decomposing organic matter, so the soil structure they create and support, along with the microbes in it, will disappear, creating anaerobic soil (without oxygen). Every serious gardener knows that lack of soil oxygen is a perfect environment for root rot pathogens.