Hey, this is very interesting. As Nexus users, I trust most of us shouldn't need to use it due to recent nandroid backups we should all be keeping, familiarity with adb we should all have, acute awareness of sketchy looking apps we should all possess, and the end-all fix of factory image installation readily available.
But still, this is interesting. I booted up in to it to experiment. I tried launching Pandora and it worked at first. It got to the splash screen and even a screen after that; one telling me about a new feature of Pandora, but then it force closed after about 3 seconds. I was kind of surprised it even got that far. I wonder how far, programmatically, it got. That feature screen I saw might have been downloaded prior to me booting up into Safe Mode, was cached, and meant to be seen the next time I launched the app. Either way, it was interesting. I also noticed all non-system apps were removed from the app drawer. The only way I could launch Pandora is because it left the icon on the tray at the bottom of my home screen. I find that interesting because it was programmed to remove the icons from the app drawer, but not from the home screen? Also: its claim of all third-party apps being disabled is technically incorrect. It just disables all non-system apps. I have SuperSU, Cerberus, and AOSP browser installed as system apps and they are intact in Safe Mode. Under normal circumstances, I suppose the claim could hold some substance. Although, with carriers and their bloatware apps, the term "third-party" kinda gets skewed...
Anyway, whoa. Back to the original post. Nice find, OP. It's pretty cool that Android has such a state.