I used to work on porous media experiments in a different context, so I will make a stab at "hydrostatic leak" as a discussion definition.

At very small grain sizes, the capillary forces have a significant impact. They are not something that people normally have to consider working at the typical macro scale of most projects.

However, it is possible to have zero flow at a certain pressure, and then a measurable flow begins above a "threshold" pressure.

I will ASSUME that in this situation, a hydrostatic leak would mean something like: the pond holds water just fine with the water level at 5'. When the pond is full at 10' deep (for example), then the pond leaks water out of the pond bottom in some location. The leak slows substantially as the water level drops, and then ceases altogether when the water is reduced to only 5' deep.

Obviously, this would act very similarly to a leak in the pond sides that was situated just above the 5' level.

Perhaps the contractor and OP have some reason to support the theory of a "hydrostatic leak".

If my definition of a hydrostatic leak is close to the physical process occurring in the pond, then that does sound like a good situation to potentially seal with Soilfloc.