Dye will work as a flocculant if you use enough of it.
Dye can influence and reduce the amount of plankton in the water column due to effects noted above. This in itself will increase transparency. Fewer phyto and zooplankton particles is like less fog in the air. I doubt that dye has any flocculation tendencies.
I agree with Bill; that dyes have no inherent ability to precipitate clay or silt particles.
Any observed decrease in turbidity after a dye treatment is due to the non-correlated settling of suspended clay or silt solids, which would have occurred with or without the dye treatment.
