To prevent the risk of engagement telemetry slipping out of the experiment (due to bugs in Safe Mode not properly unsetting the pref), we can change the engagementTelemetry property of the API to only apply to the current session, rather than flip the pref.
The urlbar code can check both the session property and the pref when enabling.

A particular combination of a WebExtension Experiment with Safe Mode may cause
prefs set through the extension to not be properly cleared. Event telemetry can
be expensive server-side, thus we don't want to risk leaving it enabled once
an experiment is complete, especially when multiple experiments will start
using it.
This provides an alternative way to toggle event telemetry that lasts only for
the session.
The preference is retained for future pref-flipping system add-ons or experiments.

Considered your pref fixes in add-ons, should we wontfix this, or take a different approach?

It depends on when you need this...but I also wonder if you couldn't just check for Services.appinfo.inSafeMode somewhere in your telemetry class, perhaps where you check the pref:

https://searchfox.org/mozilla-central/rev/cce8b90aece0f42e5025e45282de16066eeaa662/browser/components/urlbar/UrlbarController.jsm#761

Disabling the prefs in safe mode may be a while down the road.

Not actively working on this

Will not fix, as the new event telemetry for address bar is using Glean.