My ROG Maximus IX Code has the safe boot button, but I never used it and I'm an overclocker too. When things get unstable, I go to the Clear Cmos button and try again from the settings that were stable.
So, from what you're saying, the button itself isn't faulty as it triggers a boot. Since I never used the safe boot button, what we need to figure out is if it's working like it should.
Let's not give the safe boot button a bad cookie just yet as it could be normal procedure.
A little clue you gave is, it only works when the pc is powered off. What happens when you get into a boot loop, press and hold the power button to shut down, then hit the safe boot button, boot to the bios and "check my settings".
Does it keep the settings or go back to defaults?