Is this unsafe to do this?

I think it wold work fine but it's a little convoluted in its execution.
Now the safety chains connected by those threaded chain links; Those are going to pop if employed.

I don't see anything particularly unsafe about the way the brake away cable is fastened to the tow vehicle. As long as the brake away cable is slightly shorter than the length of the chains, so if separation occurs the cable reaches maximum length and then pulls the pin in the activation switch, I see noting alarmingly wrong with this set up.

I would not do it this way myself. I try to find a spot completely separate from the actual hitch to fasten mine. I use one of those D-shaped spring loaded key holder style heavy duty hook and latch it through the holes where the safety chains are hooked into.

Looks okay to me. The only thing that's important is that it doesn't bind or get caught up when turning. I don't see any reason why that wouldn't work like it is designed if the trailer were to become un attached. I use to have to hook those up all the time and I would do it this way or that way which ever suited my fancy at the time.

Well, I don't find it horrible, but there is probably a better way to do it. I think if I saw it myself, it wouldn't stand out as specifically unsafe.

Umm, anyway, back to the breakaway cable topic.....

And all painted in a rustic color to avoid rust. Tell Cheapo to fix it.