I dont know about you but the thought of me carrying soemthing traveling 500,000 rpms is a little scary.
Heck, we're BUILT out of stuff that spins faster than that.
What matters is the kinetic energy in the rotor, the momentum of its fragments if it breaks, and the mass of its surroundings. The rotor of this puppy is dinky (which is why a sane tip-speed translates to an insane RPM) and will no doubt HAVE to be embedded in a lot more of the same sort of stuff to even get it to work. And I'm sure that if it's even possible, then in the process of going from the first working to the first production model they'll address the issue in the design details.
So I have no worries about the rotor causing damage through its motion in case of trouble.
Especially when compared to, say, a lithium battery: Energy density of a hand grenade and ALL the components necessary to release it in near-microscopic proximity. Compared to a fuel-air engine with a moving part so small you need an electron microscope to see it well, and only enough oxygen and free energy present at any given time to handle the current process (so it has something in the ballpark of a milisecond of its output power to release in case of failure)? I'll take the engine.
(The only downside is the waste heat from the carnot cycle. That cellphone or laptop might heat up quite a bit more when powered with an engine than with a battery.)