Compared to the other ammunition types, bio-ammo seems incredibly OP? It does an extra 300 damage per second with the applied effect, and that is base (it is affected by projectile damage), with blue and grey researches for damage it can one shot player characters, cars, and even tanks. Seems a bit much compared to other ammo types, especially considering its ease of making?

No. I would even say that they are of little use. DoT does not stack.

It is still 300 dps which gets buffed by research up to over 1000? Even an smg can single handedly clear biter nests using it

Additionally, even if we ignore the DoT effect, it still does uranium ammo DPS without needing uranium..