Yes, I've embroidered on sparkly felt and it didn't seem to harm any part of my machine. I did use medium weight stabiliser and a gentle spray of glue held the felt in place until the machine fixed it with a basting line.
The design stitched perfectly.
AlmaG.

Now why didn't I think of that! I spent $$$ on the fabric sheets, however in some situations the felt is probably better to use. Thanks

I think the glitter on the felt is too soft to do any damage to the needle or machine parts. That glitter would be just a very filmy plastic, no hard edges or anything. The only thing I'd be careful of is maybe having some of the glitter pieces end up in the bobbin case, or other parts under the bottom. I don't know, but maybe that could be like when you get a tiny bit of stray thread caught in those places, can cause thread to break, etc.? I think I'd use some stabilizer under it, to keep the glitter out of moving parts, and check the bobbin case and parts, keep it cleaned out like you normally would, only maybe check it more often. Hugs, Marji

I have done lots of embroidery on felt , it sews out just fine what I wouldn't like is the idea of the glitter small particles will find its way into the bobbin area , I have a Bernina 830 and if the bobbin area get dust or fluff in there it tells me. Cathy