Actually, yes. This is a viable and relatively safe way to recycle tires, which otherwise would be a horrifying ecological disaster (most non-recycled tires end up going into caches that end up catching fire, tire fires are some of the worst things for the environment).

During the processing of tire rubber to be used as playground mulch, it's cleaned, and most of the worst contaminates are removed. The worst thing in the recycled tires isn't heavy metals it's carbon black, and in both cases it shouldn't matter unless your children are eating the tire mulch.