Yes, it is possible for the SWCG to generate too much chlorine, but there is a limit to how high it will go unless the pool isn't exposed to sunlight. When exposed to sunlight, the loss of chlorine is proportional to the amount of chlorine in the pool so when that loss equals the amount of chlorine coming from the SWCG, the chlorine level won't rise anymore.

Usually, you'd see your FC level get too high if your SWCG percent on-time was set to handle sunny days and you get a long string of days of cloudy weather or if you decide to cover the pool with a mostly opaque cover. It's times like these that you would turn down your SWCG percent on-time.