I have that exact box of stuffing waiting to go in my tank. The box has no mention of any fire-retardant or any anti-mildew materials, so I will be using it on my tank in the future. So to answer your question, yes it should be 100% safe.
I'd use polyester felt instead of the polyfill. in fact, I do. the polyfill you toss, whereas I've been using the same pieces of felt for 5-6 years now.
I throw the used ones in an aerated scud bucket for a few weeks, then rinse and soak in a 1/4 cup or so of bleach in a gallon of water for 15-20 minutes, rinse with fresh water and they're good to go.
In so many ways, felt is better. I don't see how fluff is going to do much way of mechanical. I mean, it will catch something but eventually it's just going to rinse through or around.