The part of the system that it involves was in the process of being re-written already. The re-write fixes the bug. Because it is essentially a theoretical issue, and not an actual problem in any real code, it is not a five alarm fire. Waiting for that re-write to land makes the most sense, instead of putting in a ton of work that will be thrown away.
This one was impacting actual users, and did not require re-writing entire subsystems to fix properly. So the engineering and product tradeoffs are different.
If cve-rs exists, we still say that safe Rust is safe, in the same way that we say Python is safe despite potential bugs in its interpreter or native libraries, and that Java is safe despite potential bugs in the JVM or JNI libraries, and so on.
It's more that Rust's safety guarantee is memory safety. No more, no less. It's not about buzz, this term was used long before Rust existed.
> it also has the gaping type system holes demonstrated in cve-rs
This is not a "gaping hole". It is a compiler bug, which has never been found in the wild.
> there are other bugs which occur in Rust
This is true! Every language can have bugs in it, and Rust does not claim to solve all bugs.