There are many toxins that can be released. Most pump motors are made using copper wire. With electricity and saltwater this can break down quickly. Electrical faults can cause high temperature arcs that will melt plastics and rubber. Think of what those smell like and imagine that getting into your water. All sorts of problems can be caused by failed electrical equipment.
This is the main reason I use a ground probe and GFCI combination. As soon as a piece of electrical equipment has an insulation breakdown the ground probe will short that fault to ground and immediately trip the GFCI. This reduces the rate of copper corrosion and prevents heat from breaking down the plastic and rubber next to the fault.
Electricity absolutely can negatively impact a fish. Current takes all paths proportional to the resistance so they can have current running through them, just not enough to stun or kill them. It hasn't been proven, but it has been connected to HLLE. It seems to be able to interfere with their depth control and their ability to navigate (even around a small tank). So electricity isn't harmless to fish, it just isn't likely to cause rapid death to a group of fish.