As i said before yes rubber / epdm can stretch and it does so very well i have used it for many projects and even made it work like a gasket. How ever as a pond liner you don't want to stretch your liner in the beginning because if there is any shifting from expansion and contraction from the seasons or even just the sun. You don't want the epdm already stretched because it's only recourse is to rip.
Now while the rounded retaining wall looks great as a backing for epdm i have concerns or the liner stretching and ripping . While non woven needle punch fabric is very strong stuff it is not made to span gaps and much as it is made to cushion between rocks and twigs from your liner the worse this situation is the higher the oz content is recommended . For instance 12 oz epdm is so tough it is beyond a pain to work with it does not even like to be cut with a utility knife with a new blade will it cut yes. But you will need to change the blade after only a couple cuts across a 12 foot roll. Would i be confident that that could support the 1000 pounds of water pushing toward the bottom of your pond ? no i would not. do i think it could hold yes but that's not the way i build . i build to where i know there will be success and it will not fail and no one will get hurt.
I have a some what similar build with my mafia blocks in my matrix bog. Mafia blocks can be very rough and poorly made as the concrete is usually from rejected or over ordered loads that return to the mixing yard. the drivers pour the left overs into a mold and wala some concrete blocks . they are not structural they are just dead weight. now the reason i mention this is the joints are also very pour they have gaps i had one that was about 6 inch wide. well that one i took some plywood leave the top of the joint exposed two inches so i could pour concrete in that void and the plywood on the lower part of the joint would hold it in place. that is similar to what i was referring to with the top row of your decorative block. Where the blocks round in i would fill that in with concrete so i would make a 8 inch wide strip 8 feet log and secure it across the top row horizontally so i can fill that in with some concrete.
Now while the rounded retaining wall looks great as a backing for epdm i have concerns or the liner stretching and ripping . While non woven needle punch fabric is very strong stuff it is not made to span gaps and much as it is made to cushion between rocks and twigs from your liner the worse this situation is the higher the oz content is recommended . For instance 12 oz epdm is so tough it is beyond a pain to work with it does not even like to be cut with a utility knife with a new blade will it cut yes. But you will need to change the blade after only a couple cuts across a 12 foot roll. Would i be confident that that could support the 1000 pounds of water pushing toward the bottom of your pond ? no i would not. do i think it could hold yes but that's not the way i build . i build to where i know there will be success and it will not fail and no one will get hurt.
I have a some what similar build with my mafia blocks in my matrix bog. Mafia blocks can be very rough and poorly made as the concrete is usually from rejected or over ordered loads that return to the mixing yard. the drivers pour the left overs into a mold and wala some concrete blocks . they are not structural they are just dead weight. now the reason i mention this is the joints are also very pour they have gaps i had one that was about 6 inch wide. well that one i took some plywood leave the top of the joint exposed two inches so i could pour concrete in that void and the plywood on the lower part of the joint would hold it in place. that is similar to what i was referring to with the top row of your decorative block. Where the blocks round in i would fill that in with concrete so i would make a 8 inch wide strip 8 feet log and secure it across the top row horizontally so i can fill that in with some concrete.