Hey H, no you haven't gone overboard with Timbermate the idea is to cover the surface entirely. You will know when it's dry it changes to a lighter colour, looks half dry in the photo.
Give it 3-4 hours to be on the safe side and you should be able to sand it off. Good idea with the toothpicks to blocks some of the drill holes. You will have to apply Timbermate to the back as well.
Don't ever worry about the time it takes, the finish is the most important part of the build so take your time and you will have a better finished axe at the end of the build.