The final product within probiotic capsules is bacterii Does halacha apply to bacteria,since they are living entities smaller than an edsha? Or is the choshesh about residues from the dairy bacteria production bed? Would traces of such residue matter?

ב"ה Shalom In general, things which are microscopic don't come under halachic scrutiny since the Torah was not given to angels but to humans with human eyes. However, having said that one should not draw conclusions from this short statement. Food technology is complex. The kashrut agencies consult chemists and food technologists when necessary to verify food production processes. The halachic status of the medium from which foods are made has to be verified and upon receiving complete information of the food production process a competent Rabbi who is well versed in food production will make a halachic ruling. All the best