Powdery mildew is very commonplace on most phlox varieties and looks like this:

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Generally it is more of a cosmetic issue than a real concern for the health of the plant and typically has no effect on its ability to flower. Powdery mildew is a seasonal issue, usually appearing in late summer when soils are very dry, daytime temperatures still warm and there is lots of evening condensation (high dewpoint). Is also very common in areas with more shade than sun and where plants are crowded (lack of air circulation).

You do not have to treat either the soil or dig and toss the plants. Just cut back and discard or compost the top growth at the end of the season. Fungicides can help but they are only preventative, not curative......typically when you see the problem it's too late to do a lot about it.

Sounds like a powdery mildew fungus.

Spores from the fungi can overwinter in plant debris on/in the soil and as you say inoculate next years phlox with the fungal spores. Hence more powdery mildew.

We love phlox and have many in a relatively confined space.

I take it that it's absolutely necessary to cut garden phlox down to ground level and remove all plant debris, in fall, to limit the inoculation (at least here).

Re blooming and other phlox health/hygiene variables: I'd say garden phlox do best with regular division, thinning out, soil upgarding, enough sun and watering when necessary.

Of course, the cultivar and local conditions are important considerations.

Below powdery mildew starting(?) on an older No Name phlox on Sept 6, 2013. I would have cut it down by then, but we were having guests and we didn't want to cut any colour out of the garden.

I grow Phlox paniculata/tall garden phlox for the pollinators who don't seem to care if the leaves aren't attractive so I've pretty much left my dozen or so plants alone the past several years. They come up & bloom every season...I don't ask much more of my perennials than that to be honest. Did some of them get powdery mildew? Sure. Did I treat it? Nope. Are my plants blooming their heads off this year? Yes. Granted we've had an excess of rain this season but they've all bloomed/are blooming prolifically.

Your plants may just need a season or two to settle into your garden beds before blooming. Gardening isn't a season; it's a journey. Enjoy the scenery.