"How much sawdust can you put in a Rice Krispy treat before people notice?"
Answer: As much as they can legally get away with. If you've ever eated grated Parmesan cheese from the store, you've eaten sawdust. They list it on the can as "cellulose."
Sawdust is not (just) cellulose and cannot be listed as such on nutrition labels. Sawdust, i.e., wood shavings, contains many other compounds, especially lignin. Wood is refined by e.g. the Kraft process to separate the lignin from the cellulose, giving a suspension of cellulose fibers in water called "wood pulp." I didn't look, but I would imagine that calling wood pulp "cellulose" on a nutrition label is fine, 'cause that's what it is.
Now, none of this invalidates the crux of your argument that cellulose can be used as a cheap filler, such as in cheap "Parmesan cheese," and no disagreement here that that shit is scummy af. However, there are some legitimate uses for smaller amounts in foods, such as anti-caking, thickening, and literal dietary fiber.
It's all about companies putting things on the label that are technically true but deliberately misleading. For years, Kraft sold "100% Grated Parmesean cheese" that was nearly 8% cellulose. I assume their excuse if they got caught would be, "Well, our cheese is '100% Grated' just like it says on the label." Meaning, everything in the can WAS "100% grated" but it was NOT 100% cheese. The first reports on this were around 2015, but it looks like their more recent containers don't have the word "100%" anymore. They're constantly playing these stupid little word games with their customers.
Before the FDA, they used to put formaldehyde and cow brains into milk. It killed children and they knew it killed children, but they tried to tell people it actually made children stronger and that we didn't need the FDA.
In the vast majority of cases, every step we've taken away from libertarianism has been a huge improvement.
Cellulose from wood is literally a dietary fibre. Just like that good healthy fibre you are getting from kale. Which is also mostly cellulose. There's no difference for your body between kale and saw dust.