I've seen them many times operating like this. They are not bound by Civilian rules so they are largely free to do anything they please. They would no doubt be using Night Vision Equipment. I've also seen them too operating at a local quiet CTAF doing night circuits with zero lights visible on the aircraft.
Have you noticed at airshows that the Roulettes and other military aircraft are the only ones that face the crowd within 500 metres when performing their display? eg. they will exit a loop towards the crowd. This is a perfect example of how they are exempt from Civilian requirements.
As for whether it's safe or not, that is another story completely. Personally I think it's ludicrous that the Roulettes are allowed to perform their sequence in relation to their position relative to the crowd. Look at all the overseas crashes involving military aircraft into the crowd - this is no different.