If you ask civilians, you'll typically get responses along the lines of...
- "No way, there are dangerous chemicals!"
- "No way, it just doesn't work!"
- "No way, you'll smell like ass for weeks!"
However, I (and many other military vets) can tell you that it does, in fact, work extremely well. Military men (and recently maybe women) have been using this trick for decades, with no side-effects besides potentially smelling really awful depending on how much you consume. Every MRE (Meal, Ready-to-Eat) comes with a book of matches handy, which is why the trick is so convenient.
One match-head per month will typically be sufficient to keep insects off of you, with no noticeable stink either. If you need more potency, consume more regularly, maybe weekly or even daily - just keep in mind that more match heads = more stink.
Yes, potassium chlorate is a toxic chemical. However, it is not contained in nearly high-enough quantities to be harmful unless you're slamming an entire pack of matches (and maybe not even then).
Phosphorus, the final chemical ingredient in match heads, is an element essential to your bodily functions, and represents 1% of your body mass.
Final disclaimer: as far as I know, only strike-on-the-box safety matches will always have the antimony (III) sulfide in them that makes the trick work. Strike-anywhere matches may not contain this element, and so might just do nothing at all.