I do agree that this is probably the most unsafe design that one can dream up, but when safety is concerned how far do you go?

So, a transformer is used with the AC mains. Do you stop there?
A fuse is placed at the input to the transformer.
A fuse is placed at the output of the transformer.
A real rectifier circuit is used to create some means of DC from the AC transformer.
A regulator is used after at the DC end.
The regulator can be further made safe with the use of diodes.
Each component that the regulator sees can use a 0 Ohm resistor fuse.

Most hobbyists stop with just the transformer powering a regulator. Is that safe? I tend to stop where the regulator cannot fail, but individual components will fail. I also try to buy power supplies that have a slew of their own safety prevention protocols.

Even when individual components fail, there is a risk of an explosion or fire because of the amount of power involved will exceed the maximum rating to be considered flame proof.

It is fair to mention what is considered safe other than saying that it is not safe. You could even go as far as the type of terminals used to connect to AC mains.