It is just debt then.
I was recently screwed over as an angel investor in a SAFE deal where the startup got acquired before their Series A, and I was just completely out of luck. "Thanks for the money, sucka" said the startup. Not verbatim, but that was the idea. Startup got the seed money, founders got the acqui-cash, angel investor chumps got nada.
As to debt, you might want to read this: https://www.upcounsel.com/safe-notes
"Startups may prefer SAFE notes because, unlike convertible notes, they are not debt and therefore do not accrue interest."
In fact, the increased size of this SAFE will guarantee more situations where startups exit before the next priced round. The more money that's put into early non-priced / non-secured rounds, the more you open up the door to early exits. This is because you're providing more runway. More runway means more time to develop the business, which also means more opportunities and time to exit before a first round.
But to the point above about losing the "investment" in acquihire situations. The loss is primarily caused by the fact that the investment vehicle is an unsecured non-debt obligation. Which means that there's really nothing to protect the investor in the situation where there's no conversion. If the Acquihire company had instead raised a priced round (the old Seed Series priced round) instead of a SAFE, the investor would be protected. SAFEs should really be "bridge" investments when there is an expected conversion opportunity in the short-term. Not for indeterminate conversions that may or may not ever happen. In fact, if I'm not mistaken, the SAFE note (and convertible debts) originate with the idea of bridge loans, since that makes complete sense in that situation.
Indeed, it's the combination of the hobbyist investor and the Uncapped SAFE notes that are not the best combination. Only sophisticated, at-scale investors should invest in Uncapped SAFE notes, and they can then be prepared for the expected downsides.
If you kick in on a friend's company, you shouldn't care what happens if their company has a soft landing; having that level of concern over an investment seems like a really good way to kill a friendship. The friendship is more valuable.