Not only will the starch wash off the wall, but it will wash out of your fabric, in case you want to use it again. On the show I saw on TV in the 1990's they used the liquid starch as it came out of the bottle, and they covered the wainscot area of a wall. They said to use a drop cloth. I don't think I have seen it used as a border, and the problem with that is it might stretch unevenly as you handle it. In a defined area, such as the wainscot, which had a chair rail and baseboard, it could be trimmed along the edges using a straightedge and breakaway knife.
It looked flawless the way they did it, but I imagine there are some potential pitfalls. For example, I think you'd want to be very sure that the fabric has been washed and will not bleed. It would only be suitable for fabrics that are washable.