| Yes, you can expect that the iron in the flagstone will leach out and horribly stain the plaster in your pool. Even if all four sides are sealed the iron will eventually leach out, stain the mortar and migrate out to the pool . You have a VERY wise pool builder with an astute eye. I know of this first hand because of a lawsuit that faced a landscape designer and a contractor in Petaluma Ca.
The designer spec'ed the stone and the contractor laid it .
Soon there after the stone started leaching the iron and horribly staining the plaster. There was a big argument between everyone involved.
The contractor said he was only installing what was specified by the designer.
The designer said the contractor should have known better ( yeah right ! ) and should have alerted her to this potential problem. I'm not exactly sure what was finally done and who paid for what because I felt the designer was liable and should suck it up and take responsibilty for for spec'ing a material that she did not do adequate research on. ( Not the answer she wanted and I was no longer consulted ) Even if you seal the stone the sealers eventually break down ( especially around harsh pool chemicals ) and the iron will migrate. Play it safe and use the stone away from the pools edge, and if you do use it around the patio, know that the iron does migrate thru the mortar so if you use it as the patio surface and not as the pool coping make sure you install an adequate water proofing detail between the stone and the coping so that it doesn't migrate thru the mortar joints to the plaster. | 
