i'm not a salty, but i like diy
some potential problems I see
1> having both tank overflows drain into the fuge ... depending on how many GPH
your return pump is pushing, are you concerned about violent currents / whirlpool effect of having all the water dumping into a 10 gal
refuge without any baffles?
2> you show your drain lines being connected by a tee ... as I understand it, this will create backpressure on your drains, seriously decreasing the their flow rate.
3> the only way for water to get out of the fuge and back to the tank is by the gravity drain that connects them? ... what happens if this clogs with algae or debris ... does the drain have enough flow to support both drains from the main tank?
in regards to that paddle flow switch being put inline with an overflow drain.
I do not believe that would work ... look at the pressure rating on that thing 3600 PSI! ... the water flowing down a gravity powered overflow drain, you would be lucky if you saw 10 psi
putting a float switch in the main tank to watch for low water wouldn't be any help, since by the time the switch noticed the low water level, all the water will have been spilled somewhere already.
putting a float switch in the main tank to watch for a high water level might help, since then turning off the pump will prevent the display tank from overflowing, but might make the sump overflow
float switches in the sump would serve similar purposes with similar problems
the best way to deal with it is have the system balanced so the sump can take in however much water the tank might drop during a power failure. also, have the display tank's water level such that it can absorb however much water the sump can deliver if the overflows get clogged and is not draining.
just my 2 dollars (heh, 2 cents isn't anything these days!)