The mold is going to compete with and kill the mushroom mycelium and the substrate will not be suitable for raising larvae. The larva will not eat the green mold and will likely starve due to the fact that the mold is unpalatable and the substrate is not at the right stage of decomposition. I don't know if the mold can harm the larva, but the spores do pose a health hazard for you. All of the green you see is mold spores, the mold mycelium is insignificant and is feeding off of the dying mushroom mycelium and any free nutrients in the substrate.