Anything with pieces big enough to cause obstruction if eaten is discouraged. Substrate is not necessary for cage bottoms and can harbor mold. Most keepers don't put anything on the plastic cage floor and just wipe it down when they clean the cage.
Cedar mulch contains oils that are not good for chameleons. I don't know if others do or not.
As was said size of pieces needs consideration and also digestibility in case of ingestion...occuring accidentally or on purpose....needs to be considered.
I'm one of the minority who uses substrate, and I would not use regular outdoor mulch of any kind. There are much better options which you can acquire just as easily. If you are not planting live plants into the substrate, plain fine peat moss works quite well.
