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We couldn't install axles this way yet because we are still witing for our T nuts, but we drilled the holes and mounted the axles using regular 1/2" nuts and large flat washers, which seems like it will work fine.

The advantage of the t nuts is it lets us mount the sprockets as close to the frame rail as possible (we plan to use bearings in the sprockets to keep them concentric, making tensioning easier on a single chain run). I don't think the T nuts will have any problem, they are supported by a lot of material, and will be held in very tight by the nut inside the frame.

EDIT: After discussing the design with my dad, I see how the axles might loosen due to the wood compressing. We might want to do a test by mounting an axle and putting a large torque on it with a lever to see if it loosens or gets damaged.