I have used clay a few times with good results, both below a sand layer and on its own. When exposed it might cloud the water initially, but the particles will settle out once you get some algae on them to hold it all together. I think a doing a dry start for a few weeks until a biofilm develops could reduce the cloudiness substantially.
Plants didn't seem to mind having their roots in "pure" clay (the Utricularia gramminifolia enjoyed it very much actually), but the clay here is probably quite nutrient poor, so wont create many noxious substances (like hydrogen sulfide) while submerged. You definitely don't want to combine clay with a substrate rich in organics, that would send the redox potential down to levels where you get toxins forming. Most aquatic plants other than epi/litophytes should be used to growing in clay or similar in the wild, and should have ways to handle it provided all other parameters are good.