Basic Fantasy (a Basic D&D Retro Clone) has the XP for Gold optional rule: 1 GP of coin or treasure returned to a safe place rewards the party with 1 XP. This is in addition to normal XP rewards. What do I need to look out if I use this rule?
Yes, yes it will.
I do have experience with BFRPG. It's a very tidy clone of Basic D&D with some nice mechanical bits from d20, but it's still very much BD&D at its core. (I have experience with that too.) Judging what feel and style of campaign you're going for by your question and comments, giving full XP for gold will level them too fast:
It sounds like using an optional rule has been compounded by a module that had treasure far in excess of what is normal in a BFRPG campaign. And it sounds as if the damage is already done – your players have had their sense of the "right" amount of treasure calibrated for the entirely wrong amount, and their characters are overflowing with gold and high-quality gear. The gear and potions aren't a real problem – d20 players assume gear matters, but it only matters a very little in BFRPG because the system is less swingy around gear – the real problem is that the players have set this as their new baseline and will expect their PCs quality of living to be maintained at this new level.
Basic D&D is all about the striving, and the players will want as much gold as they can get a hold of, but ironically having it too easily will make the challenges they face hollow and rob them of the essential fun of the game. To fully appreciate a Basic game the players have to have a sharp appetite for gold, and nothing dulls the appetite more than having plenty to go around. There's some fun in turning on "god mode" in a videogame, but it pales after a little bit of rampaging – for a long-term, sustained campaign, the players have to hunger for improvement, and relish every scrap they wrench by their own cunning and skill from the hostile campaign world.
There are only a few ways to recover from this, and none guaranteed. Some can be mixed and matched, while some are obviously incompatible with each other.
If your players are extremely reasonable, you can reset the campaign. They keep their XP and basic gear, and get a certain small fraction of the monetary value of what they'd gained before. No plate (unless they re-buy it), no magic, no potions. The "history" of the game is reset, so that this is the new start of the campaign – whatever they did before never happened. This is your best bet for cleanly recovering the game.
The compromise is to keep going, but to dial back future treasure significantly. You need to recalibrate your players' expectations to something more reasonable, else they will lose their edge, the game will lose its appeal, and the campaign will end with a whimper.
To do this you'll have to rewrite the rest of this module's treasure, and any future ones so that they have treasure more in keeping with the treasure generation rules that BFRPG comes with. For each cluster of monsters, roll them up new random treasure according to the Treasure chapter (p. 118, Basic Fantasy RPG 2nd edition, revision 75). Collect it all together for the entire module, then parcel it out into the places where the original treasure hoard was, keeping the new treasure caches roughly proportional to each other's original values. This will give you an amount of treasure that will probably be far lower, but make the module's treasure and monsters match up better (though still roughly) with BFRPG's intended balance. It will still only be a roughly matched to the monsters because it's random, but the amount of variation random generation creates is still going to be far, far less mismatch than the huge gap between the monsters and the treasure you report them getting.
Something you should consider doing if you're not already, is capping how much XP can be won in a single haul. The traditional way of doing this is to limit the amount of XP you can gain at once to the maximum possible without levelling twice. So if a 1st-level Fighter hauls home 4,500 XP worth of gold, they can only gain XP enough to get to level 2 and 1 XP below 3rd level; their sheet would say 3,999 XP and the remaining 501 XP (or more, if they didn't have 0 XP to start with!) is just wasted.
The point of doing this is two-fold. First, it prevents levelling too quickly. Second, it requires them to make a trade-off: do I keep adventuring for more treasure, or do I get back to civilisation sooner and use the treasure-for-XP more efficiently? Giving them a conundrum like this means that it's up to them: the rule is hard but fair, and how they choose to adjust to it is in their hands. It gives them a bit of agency while not letting the levelling spiral out of proportion.
When doing this, always, always make your dungeons a living place. Did the PCs decide to haul home what they'd found so far without exploring the whole thing? Find some dungeon-restocking rules and make sure that it doesn't just stay frozen in time, conveniently waiting on their pleasure to pick back up right where they left off. If going back to civilisation is going to be a meaningful choice that your players will weigh and consider, it must present a trade-off.
Don't use XP for gold rules
The XP for gold rules are optional. They're intended for DMs who want the PCs to level quickly, which it sounds like you don't. Eliminating the XP for gold rule means that every XP has to be fought for, tooth-and-nail. (If you do this, consider giving XP for defeating monsters, not just killing them. Forcing them to surrender or flee should be good enough, and if it's worth XP, you'll see less fighting just to pop the XP pinatas.)
The disadvantage of eliminating the XP for gold rules is that using them encourages a very different playstyle that you might prefer. With gold worth so much more XP than the monsters, the players are heavily rewarded for finding clever ways to get to the treasure. A game with XP for gold sees players backtrack and find ways around monsters, or ways to sneak by them, parleying with intelligent monsters, and avoiding monsters they know are mindless and unlikely to have gathered any treasure. A game without XP for treasure sees players hunting down every last monster in the dungeon because they want the XP and it's the only way to get it, and not very much at that. The former game has more cleverness and survival, the latter game has more brutality and PC death.
Modify the XP for gold ratio
This is a typical compromise. Instead of giving out 1 XP for each gold returned to civilisation, DMs may aware 1 XP for every 5 or 10 gold. This makes treasure still very much worth the effort to get around the monsters, keeps the levelling somewhat faster than it would be without, and keeps the players from seeing monsters as merely meat to grind into sausage.
Use training rules
This is an easy way to make gold flow a bit more freely without having it flood the players with XP: make them buy training to get that gold to convert into XP. This means they will have to choose between supplies and XP, which is again a fair but hard rule that puts the fate of their character into their own hands.
Alternatively, let them spend gold "uselessly" in order to bank XP for their next character. Usually this should be at a lower ratio (I've seen 10 gold to 1 future XP work well), so that it's not too easy to start their replacement character at a very high level.
The gold spent must be spent in a way that cannot possibly benefit the character – anonymous charity and tithes are good examples. Carousing is another traditional way to "uselessly" spend lots of gold; just make sure that everyone who benefited from the PC's largess doesn't feel like they owe them anything for the party, else it'll start becoming useful as well as a way to bank XP.
Another necessary limit to this option is that the XP must go to one future character, and only upon death of the banking character – it can't be taken out of the bank a little at a time, but must be put all into one basket. This "heir" will inherit all the banked XP, and then the bank is empty. This is to prevent the player from hedging their bets and treating death as only an inconvenience. By having the bank empty every time they start a new character due to the last one's death, they have to protect their investment and use it wisely.
The advantage of this is that it's an excellent outlet for excess gold, and it takes it entirely out of the game for the time being. No supplies, no XP for the current character. It also serves as a constant reminder that death can easily happen. The disadvantage is that they might end up banking so much gold that they short themselves on necessary supplies, and end up making death more likely for their current character – I had one player do that, and it wasn't pretty watching them scrabble for coin enough to feed themself and their horse when they otherwise could have started to get a little comfortable and have a bit of coin to spare.
Don't help them find the treasure
I look at a module and I see all the cool things the PCs can find, and I want the players to share my enthusiasm. I want them to find all the treasure they can. This is an impulse to absolutely stifle. I know the feeling, but it's harmful to the campaign in the long run to indulge it.
A player must always be wondering if they missed something, else they'll start treating it as a computer game that they need to get 100% completion on, and less like a scary, living world full of threats that they need to carefully judge and weigh the worth of facing. A player that knows you won't let them miss treasure is a player that is resting comfortably on a pillow, and they won't be able to take the risks to their characters seriously. Entitlement is the death of many a game. Make them earn their treasure, and they will become cunning, careful, and clever investigators of the world. Give them even the slightest hint that you're handing them easy victories and they'll stop trying so hard, be less entertaining to DM for, and simply become careless with how they interact with the game world. And then when they (or a retainer) die to a trap they should have learned the habits to avoid three levels ago, they'll blame you. In a way, they'll be right.
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I have no experience in Basic Fantasy, but this rule also existed in AD&D 2nd for rogue classes, and we used it in our campaigns. If you use individual class awards, it is a must to use this, as otherwise rogues would be at a disadvantage. Everyone gets bonus xp for what his purpose is: warriors for defeated hit dice, priests and wizards for spells and item creation. And getting loot is what rogues are for.
D&D 3 regulates how much loot (equipment, money, you name it) characters have by tying it to character level. AD&D 2nd did it the other way around by tying level to loot. It is an indication: if your rogues are leveling up quickly, you are handing out too much loot for the level. Of course, if you prefer well-equipped but low-level characters, you can always cut down on the GP2XP ratio.
First, I'd point out that the optional nature of this rule in BFRPG is a big difference from B/X:
-- Basic Dungeons and Dragons page B22
In the early editions of D&D (prior to AD&D 2) treasure was designed to be the largest source of XP. I know a lot of people didn't play that way but the rules were written that way.
Things to watch out for if you use this? Resource problems will disappear fairly quickly. It will be the odd 2nd level fighter who isn't in the best armor. By 5th level it would be down right weird for him not to wear it.
Second is giving out treasure too easily. Modern dungeons in the 3.x and later errors are designed so the players find all the treasure. In fact, if they don't something probably went wrong. It's pretty much the opposite in older games. There was an expectation that most treasure wouldn't be found. This is because the dangers of the old school environment: traps on treasure hiding places, wandering monsters, and so on created risks in just searching for treasure. This leads to my third point.
XP for treasure is one component in a broader play style. Taken and used in isolation from that play style it will lead to faster and easier advancement. I think this is why treasure for XP was ignored for a lot of groups even in the late 70s/early 80s. They didn't engage in that play style so XP for treasure resulted in fast advancement.
If you are giving XP for GP don't make treasures easy to find. Killing a monster and then finding a chest of 100gp shouldn't be common. Treasures need to be in locked and trapped containers, often ones that can't be broken open. They should be behind hidden doors, under floor boards, and so on. They shouldn't be easily portable coins but furs, large pieces of furniture, or a whole jade throne that requires planning and risk to get back to civilization.
If you want to use XP for GP bring in the other aspects of the play style that it supported. Read Matt Finch's guide to old school play. Read Gygax's columns from Dragon. Read discussion on various old school blogs. Look at older Judge's Guild products to see how treasure is hidden and guarded more than just by a monster.
I have never played Basic Fantasy, but I have used similar variant rules in AD&D and Shadowrun. I will say that for flavor reasons I always required the characters to find a trainer and spend time in addition to the gold/nuyen, but with that in place it worked quite well.
As I see it there are a few different problems that can come with levelling/gaining-skills-through-karma too fast:
But I think paying money takes care of 1 & 2 by itself. After all, they have increased their power in one way (gaining personal abilities), but decreased it in another (giving up money means giving up equipment options and the chance to hire henchmen and services.) As long as you aren't selling the XP too cheap, balance is retained and its just letting the players express their preferences.
Number 3 can be a big problem in tactically oriented games with inexperienced players. But much less of a problem in more narrative games or when most of your players have experience with the rules anyway, especially if they have played their particular class before.