Lots of water in a reservoir is not particularly safe in itself. For example, in December 2000 at the Grande Dixence a high-pressure pipeline from the dam burst, causing a landslide that wiped out a small hamlet and killed three people. It's also not hard to find reports of massive amounts of casualties and/or property damage from dams that just outright fail.
Yeah a large pressure vessel is basically a bomb. No matter how many layers of protection you add on the technology always wants to go too a rapid critical failure. Using statistics and layers of protection you can always show it to be safe to handle anything but when you get to such low probability your models be always be off and variables that you think are independent are actually linked (bad maintenance practices being one)
Water reservoirs for energy generation/storage have gone through accidents killing thousands. I suggest looking up Vajont on Wikipedia.
The project mentioned in the article seems particularly safe to me as they seem to run it with constant pressure, defined by the hydrostatic head of their deeply dug cavities. They don't really have a pressure vessel, they have a flooded cavern where they create a bubble by pushing in air. If you pop off a seal from the pipes connecting compressors/turbines to the bubble could still hurt yourself a lot shooting parts through the room, but that should be all.
The cavity they build is 2000 feet deep, which equates to the pressure of a CO2 cartridge that you'd use for e.g. carbonating a beverage. Not coincidentally at all I think, they either aim for the deepest cavity were hydrostatic pressure isn't enough to liquefy parts of the air, or for the least deep dig that gives them liquefication, where the air "boils off" as they open the valves.
Pumped storage is a bit different than an ordinary reservoir with a dam, though. You have more opportunity to build it in a place where it's less likely to cause harm is something goes wrong. It has been used pretty effectively on both sides of the border near Niagara Falls for 60+ years.
Yeah I realized that pretty much right after writing it, that it's biased from having gone through many iterations of dangers, and by now we know how to do it safer than less well used methods. So we can't say it's intrinsically safe only relatively from experience of use.
