Each deployment has its own independent copy of /etc. So e.g. when you rollback you’re also rolling back to the previous deployment’s /etc.
When you upgrade, the defaults of the new deployment are merged with your current /etc so that modifications you’ve made are kept.
The directories in /ostree/deploy/fedora/deploy represent all the deployments your system currently has (those should be as many as what rpm-ostree status shows).
So yes, it’s completely safe to modify files in /etc. 