When all the algae in your tank dies off at once, it causes an Ammonia spike.
Ammonia spikes cause Bacterial Blooms. (cloudy water)
Algaes can act as part of your biological filtration.
Combine a massive die off, resulting in a spike in Ammonia, with reducing a large amount of biofilter at the same time.. and you have a very large bacterial bloom.
Also, algae provides Oxygen, which feeds your nitrifying bacteria.. Take away the primary O2 source for your nitrifying bacteria, and it kills it off.. This makes your biofilter have an even harder time keeping up with the ammonia spike you just created from killing off all your algae in one shot.
The Algae killer didn't do anything other than what it claimed to do. I love it when they say it killed the fish, too!