My question is: is it safe to use 4.3-rc2 and then update my system
using qubes-dom0-update?
In principle, as long as the updater of 4.3-rc2 works fine (which I
have not tested on that particular version), then you should be able to
upgrade and apply any subsequent (incl. security-critical) patches.
Consider this before you doing anything:
It is not fixed even in 4.3.0 and caused me a lot of confusion.
I could buy a larger USB flash drive, but it wouldn't be as safe as
using my old stick that I fully trust.
If you want a USB drive you can trust, consider Nitrokey Storage. It's
firmware is FOSS and you can rebuild it with a custom size of the
non-encrypted volume. It also has a setting (through its app) to make
the storage read-only which is additional security.
Also, it would be great to have official signed ISO images without
Fedora templates
Or with minimal templates.