The Bondo itself isn't likely to swell or even absorb a noticable amount of water. Bondo is simply polyester resin (the resin used to make most fiberglass boats, and in this context, it could be considered virtually waterproof) mixed with ground-up mineral fillers until it becomes a thick paste. Substances like talc and fumed silica are commonly used for filler. The danger from getting this boat wet is more a matter of the possibility of wet wood swelling around the fills and "popping" the bondo out of the craters. At that point, you might have little lumps of hardened Bondo pushing outward on the canvas or floating around between the planking and the canvas. The other possibility might be big chunks of fill coming loose and no longer doing the job of filling the holes they were slathered into, and/or losing whatever structural strength, stiffness, etc. it might have been providing to a damaged and filled section of planking.
Polyester resin doesn't stick particularly well to wood and the more filler that is added to it, the worse the bond and lower the peel strength of the patch. The suggestion to hose down the boat to see what happens is more to see if the wet, swelling wood is going to pop any of the fills loose or cause them to stick out - thinking that it's better to find this out before applying new canvas than after spending time and money re-canvasing the boat. I'm not really expecting much to happen if you do wet down the hull as Bondo is pretty inert and wood doesn't swell all that much, but it's probably worth doing just to be sure things will stay put when the boat eventually gets wet.
"Bondo" is actually a trade name for one particular, and very common, brand of automotive body putty. There are plenty of others out there. They range in color from white to black, grey, blue, green depending upon what brand they are and their hardness (and sandability) varies dramatically depending on what that particular brand or type uses for filler (silica is hard to sand, plastic powder fillers sand easily, various minerals and blends fall somewhere in-between). The screen is a tell-tale sign that they purchased an automotive body-filler kit (comes in a cardboard can with some body putty, hardener for it, small chunks of screen, sandpaper, etc.). The screen is included in the kits for bridging small holes (like rust holes in fenders). It provides a little bit of structure for the putty to stick to as it bridges the hole and acts to some extent like re-bar to help strengthen the suspended blob of putty. The person who patched your canoe must have decided that if the screen would strengthen a fender patch, it must be worth doing on a canoe as well. You can also tell whether it's polyester or epoxy by smelling the sanding dust. Polyester (auto body putty) dust smells like styrene (plastic model cement). Cured epoxy dust generally has very little odor.
In reality, even with the screen, it's pretty weak stuff. If you suspect that the filler in any given spot is in any way being used for structural strength, it's probably worth removing and replacing with wood. If it's just filling a small dent at a tack hole, on the other hand, and things don't seem to move if the surrounding wood gets wet, then the only real reason to remove it is because you don't want it there. It's unlikely to ever cause a problem and sanding it flush, canvasing over it and forgetting about it is most likely going to do just fine. The truly suspect areas are the big fills and those are the ones where you want to spend your time.
Anybody remember a product called "Rock-Hard Water Putty"? My dad had a can of it when I was a kid - a can about the size of a small oatmeal can with a tan and maroon label. It was some kind of water-based, air-dry filler putty, maybe casein-based. Anyway, it's one of the only tan-colored pre-manufactured fillers I can ever remember and it wouldn't surprise me if that's what the stuff in the tack head dents is. It would be about the proper vintage for an old canoe and something about the way it was putty-knife-applied reminds me of it.
