Whether the sand bed is going to host bacteria which converts nitrates into nitrogen gas is dependant on having an area that is anoxic (oxygen depleted). This is a function that is dependant on particle size, very small particulate sand such as sugar fine aragonite sand can become anoxic in much shallower depths, as little as an inch or two.
Larger particle size sand, such as the sand from TBS will require more depth of sand to acquire this. The functionality of the sand in the tbs package is not really targeting this need, what it does is provides a very diverse microfauna population which will turn over and clean the sand continually.
Despite the shallowness of the sand bed, this set up will still be effective for you, the sand will convert nitrites to nitrates, and then deep within the rock itself (TBS rock is quite porous) there will be anoxic areas which will finish the task of converting waste to nitrogen gas.
I set up with a TBS package initially (6.5 years ago?). It worked great for a long time, however eventually the sand bed did start to become ineffective as the diversity of critters living in became locally extinct and slowly died off. Eventually I pulled it and replaced it with a few inches of very fine aragonite, which is what i still use.
Whether or not to add more sand is up to you, and what you want aesthetically for the tank, fine sand will mix with the larger particles, but this is not necessarily a bad thing, I did it with mine as well. Keep the sand bed healthy and occasionally recharge the microfauna through sand trades, recharge kits, or attaining a stray handful of sand here and there from the LFS and you will be in good shape for several years with it.
disclaimer: if i were to do it ove again from the start I would only want a few handfulls of their sand for the microfauna, and would go with an inch or 2 of fine aragonite sand (I do have an advantage though, TBS is just a couple of miles down the road).
