While you can argue that SAFEs are roughly equivalent to equity (with the advantage of allowing rolling closes) they are very bad for startup employees. Many startup employees have no idea how much they really own of a company because their equity disclosures do not include the conversion of the SAFEs upon future equity rounds.
I have met many companies where the first few employees think they own 1% of the company, and after a Series A where 25% is sold they find out they only own 0.5% because the SAFE conversions took up another 25%.
In some cases founders don't understand what is happening or how to include SAFEs in their cap table, in other cases they are purposefully obscuring the cap table. Whatever the reason it's very bad.
SAFEs (and convertible notes) are also good for pre-equity round employees because companies can grant them shares instead of options. People who own shares outright are much better off tax-wise than people with options.
You are right, though, employees are better off when they understand conversion mechanics. And when they don't work for dillholes that mislead them with complexity.
You can grant employees shares regardless of how you raise outside capital. Whether or not you do so is a decision of the company leadership, not a result of how you raise money.
I have met many companies where the first few employees think they own 1% of the company, and after a Series A where 25% is sold they find out they only own 0.5% because the SAFE conversions took up another 25%.
In some cases founders don't understand what is happening or how to include SAFEs in their cap table, in other cases they are purposefully obscuring the cap table. Whatever the reason it's very bad.