My father was on O2 for a number of years when he lived in his home. He did NOT smoke. The warnings were horrendous and if the warnings were to be followed he probably shouldn't have been living in his home. The natural gas furnace was in closet off the kitchen, the natural gas water heater was in a closet in the bathroom, and in his favorite sitting area a natural gas fireplace. In all the years he lived there, there was never any safety issues, nor did any health care / O2 provider ever mention an issue.
Now if we think about it, he was on a concentrator which means it separates the O2 from the air and feeds it to the person and exhausts the nitrogen back into the room. His furnace was a forced air type and he kept the fan on continuously, so that the overall O2 level was not "concentrated" in the house.
I would think that 99% of any issue would be the result of someone smoking with an O2 source above the lit cigarette. In a normal shop and no smoking I would think the risk would be extremely low, especially if using a concentrator in the same room.
David