I get it. But that's an old pedantic saw. I understood from context perfectly well it was about the particular chemicals used to treat cheap wood pallets.
People smoke and do lots of other stuff that is unhealthy in the long term but that gives them what they need short term. I'm pretty sure that given the choice between sleeping in the rain (which I could not) and sleeping in a shelter with some probability (probably unknown to me) of issues in the longer term I would pick the shelter.
Also, I thought the design was rather light on ventilation and I wonder how you'd deal with things like mold and fungi. All in all this is a crappy solution for a real problem, props to the person that came up with it but in reality this is not a solution, merely more problems and a way to declare the problem solved so we can pretend it is no longer a problem.
Btw, look for the letters "HT" on pallets when you want to re-purpose them, that indicates the wood was heat treated rather than chemically treated.