A french link shouldn't touch the pallet either.. he should be fine in it.
That much foam is NEVER a good sign, yes some foam is good, but it should only be like a tiny bit of white lipstick. Any more and it is a sign of the horse being stressed.
Instead of just looking at the bit, try to examine his whole environment and find out if there is anything that could be causing his anxiety. A horse that chomps the bit so vigorously that there is foam streaming from his mouth is obviously under a great deal of stress and discomfort. Check saddle fit, have a soundness exam, etc, etc. You really want to try to eliminate any stressors in the horse's environment.