Actually, the chance of harm for frost distillation is slightly higher than steam distillation. The volatiles that are ordinarily removed from the distillate as "heads" and "tails" stay with the alcohol fraction instead. As frost distillation is the traditional process for going from hard cider to applejack, additional care must be taken in the fermentation step, because if the Saccharomyces are contaminated by bacteria that ferment sugars to acetone, butanols, propanols, or fusels, those contaminants will be present in the final product. They probably won't kill you, but your hangover is going to be terrible.
In a clean, well-controlled fermentation vessel, as one might find in an open commercial operation, this is not a problem. But when the process is outlawed, and the producers have to hide, often in places that cannot be biologically sterilized, this problem could occur more often.
But then again, it isn't really about public safety, but about people who want to control other people. Otherwise, the law would mandate adequate fire protection for steam distillers and establish upper limits on non-ethanol fermentation products in frost-distilled products. Either could address the safety concern without outright banning the practice.