@RoGeorge. I don't think it was the lasers photodiode picking anything up although it might have played a small part. The optical arrangment was a laser diode followed by a slit and a spherical uncoated colimating lens, a short measurement path of a few cm, another spherical uncoated lens to focus the colimated beam onto the detector diode and another slit. The slits were suposed to act as apertures but probably introduced some diffraction and the spherical lenses were held in place by nice shiny brass rings with lovely sharp edges, ooh look more diffraction patterns. You could also adjust the position of the detector diode for "optimum response" whatever that was. I think that in the sensor I had the detector diode was so far off the optical path it was picking up an "outermost" fringe and probably that is why it worked well as a microphone, eventually I moved the sensor a little bit and I couldn't get it to work as a microphone again, I think it was just luck. It was supposed to detect a change in wire diameter and I think they sometimes worked more by luck than by design.
Never thought of using a lasers photo diode as part of a interferometer, but a cool experiment.

I've seen people setting up 50mW laser diodes for 30mW measured power after a colimating lens, if you angle the power meter just right you can reflect a lot of energy back through the colimating lens and into the laser diode. The end result is that now you've got maybe twice as much photo current being generated by the lasers photodetector. Set the laser control loop up for that amount of photocurrent and it's no wonder that the laser failed maybe hours of days later, because it's set for the wrong photocurrent and it's trying to gererate more power than it's rated absolute maximum. I used to make sure that the reflected beam coming back from the power meter just missed the laser diode and never had any problems.