The more packages you install rpm-ostree, the likelier your system will break. You effectively turn back to a traditional distro that relies on a package manager, so all the things that can go wrong with a package manager are bound to go wrong. The whole point of fedora atomic is to offload the OS composition (so all the complicated packages stuff) higher up the chain. So that not everyone mixes up their own combination of packages installed, but instead you get a (semi-) fixed combination of packages that has been tested to work already before it lands on your computer.

The uBlue images are just different package combinations - but still you’re not the only one rocking the packages combination of bazzite for example, so it is rather unlikely you’ll run into a problem that only you and nobody else has.

This to me is also what sets fedora atomic apart from Suse MicroOS for example. With MicroOS you still have a package manager messing about with the system, and once it makes a mistake that gets buried in your system forever, except if you notice, roll back and fix it. As where with fedora atomic the mechanism how your system layout comes to your computer is similar to how git works (ostree) or images (like docker, which is what ublue ships). So if there’s a mistake in how your system is layed out, the next time you rebase/update you are guaranteed to end up with a the intended system layout.

Yes, basically. uBlue doesn’t maintain distros, really, it just repackages Fedora Atomic with some minor changes (including non-free drivers, for instance). That way if you need the software they repackaged into the image (like Nvidia drivers), you don’t have to use overlays, and instead can use uBlue images. In fact, you can actually rebase Fedora Atomic to uBlue and vice versa with a single command. All it does is change where the base images are fetched from, and it’s a potentially easy way to switch between images without having to perform a reinstall (do note that different packages in the base may modify config files that will persist between rebases, though). I haven’t personally tried it, so I don’t know if there’s a likelihood to run into issues, but it’s an interesting option nonetheless.