Well next time I clean track I'll wear a hi vis jacket, helmet and have a fire extinguisher to hand. (just kidding). The corduroy cloth is just damp with cleaning fluids such as methylated spirits, acetone, etc, which while flammable are a bit like paraffin and diesel, difficult to ignite. The CMX itself is all metal construction. But you raise an interesting point, and one I had never considered before. I guess if folk allowed excessive cleaning agent to leak onto the track/sleepers and/or underlay/ballast the risk would be greater, but used properly only the rails get a wipe of the cleaning fluid, and should never come into contact with the sleepers or ballast.
So far I am reasonably impressed with it's cleaning ability. A simple idea well implemented and despite the excessive price I think it is worth it. Think of all the track work of some layouts that is not easy to access for hand cleaning like under baseboards, under scenery, etc, with this thing you just drive it around out of sight.