The correct grammar for I'm fed up with this topic. would be This is a topic up with which I'm fed. which sound ridiculous. Is there a grammatical rule or guideline that states the first quote is acceptable?
Actually, you're first sentence was grammatically correct. I'm fed up with this topic.
It did not end in a preposition, and further more, up isn't a preposition in this sentence. Prepositions don't stand alone, they make up prepositional phrases. Prepositional phrases begin with a preposition and end with a noun.
That's why ending a sentence with a preposition is wrong, and it sounds wrong, because you're ending the prepositional phrase with a preposition, instead of with its noun.
Thus, "fed up" is a state of being. That means it's actually the verb in your sentence. I'm verb with this noun!
If "up" were a preposition, then "fed" would have to be the noun, and it should always appear "up fed". I'm up fed with this topic. Clearly, that's the ridiculous thing here, not the rule.
Thus, the rule doesn't apply in this case and never did. Cheers.
"fed up with" is an idiom and stands together, however you chose to parse it. "Fed up" may be regarded as a derived verb, althoguh not in the sentence
I'm afraid George is simply fed up.
In either case "fed up" does indicate a state of being.
This is a topic up with which I'm fed.
does not work, because it breaks the idiom. It may be understood, as a humorous reworking of the idiom, but if so it works precisely because it is, in the normal way of things, wrong, or at least abnormal.