I think it would be reef safe with some caveats. It would probably swallow any little fish and/or moving animal that it could fit in its mouth. But a 2-inch fish can't fit very much in its mouth.
Ok, my 5 days experience with these fishes:
They don't hide much; stay in open rocks; move little.
They didn't bother my other fishes (2" and more).
The only thing i saw them eat are the live small guppies (1.2cm).
I read they eat more at night.
I read they are carnivorous and won't bother the corals.
Not really. I just encountered this species recently, and had recalled John saying it was pretty much unavailable in the US back when this thread started. If anyone searches this site for, say, "Sebastapistes", they previously would have gotten zero results. Now they get this thread, and can share their experiences here. Information sharing, a win-win for everyone.
I can't say it isn't fun to correct John though, even though it's once in a blue moon.