This is a good question for @blocktrades to answer as this is their proposal, however in the event that the price of STEEM drops such that the debt to equity ratio falls below 10% again, then SBD will no longer be convertible to $1 worth of STEEM. So the same mechanisms that are in place to prevent the debt from going over 10% will still apply and function.

If SBD is still being printed in this new scenario, then that will just mean that projects get less funding in fiat terms than they asked for (which is bad but unavoidable) and that it will take a larger increase in the market price of STEEM to get back under 10% since new SBD will continue to be printed.

In my opinion, this is ok, and as discussed in the post if it becomes a problem, the STEEM Power holders can vote to burn the SBD instead of use it to fund projects if they feel that this is better for the overall platform.