You are, basically, making your own coconut extract ("Tincuture") is what you are doing. I used to do this with cocoa nibs for my chocolate porter. Toast, soak, toss. However, what I have learned as a 'professional' now is that this isn't allowed unless you get TTB approval prior. Putting anything that isn't Reinheitsgebot approved, basically, needs TTB approval. Most certainly liquor. While still needing approval, to me, a good coconut extract is the way to go.... keyword: good. Not some cheap ass extract, it's gotta to be a good, true flavor. Again, the biggest factor for me is, this allows us to control the flavor profile. We can add to the fermenter or we can add it just to the keg as we are kegging and we will always get the right amount of flavor we are looking for.
I have yes. I have done it with toasting my own coconut and tossing it straight in... that was a HUGE nightmare. I have done with toasting and putting it in a sack and DH'n with it. The problem I see is that what you really want is the oils that come with toasting and a couple of things happen here: 1) It takes a boatload to get a decent coconut flavor and 2) These oils reduce head retention and basically make the beer look flat and IMO, almost unappealing when it is poured. I like a good, chocolaty, head on my porters when poured. The way around this is coconut extract. Using extract does at least 3 things for you: 1) No toasting, no mess! 2) Easier to control flavor profile & be consistent with it and 3) Gives you head!
it will not hurt anything. it is pretty foamy stuff. when i bottle, i just pour the solution out the best i can. ignore the bubbles and let them overflow when bottling to the proper level ( i use a bottling wand). you don't need to rinse it. after i cap a bottle i run it under the sink and rinse off the outside of the bottle, but that's it.