the questions are 'Will this automatic rewriting cause other problems, i.e. browser quirks?'
A snippet out mod_pagespeed's "rewrite CSS" filter:
Yet their own examples show other risks, as they rewrite CSS selectors from longer selectors to completely different short selectors (i.e. from "div.class span" to "#id"), which even in their examples are only superficially equivalent, and not taking into account any dynamic content the page may render via JS. So any application utilizing JS would suffer a range of awkward issues, even if your code is perfectly valid.
Talking about valid code, one of their other filters:
"The quote removal filter eliminates unnecessary quotation marks (either "" or '') from HTML attributes. While required by the various HTML specifications, browsers permit their omission when the value of an attribute is composed of a certain subset of characters (alphanumerics and some punctuation characters)."
The rest is predictable and of little use: cache headers, image compression, JS minification, CSS/JS outlining/inlining, whitespace collapsing, and removing attributes that specify defaults. Those are all basic and low yield optimizations that any web developer would, for the most part, have done in his original source to begin with.
Unfortunately Google's expertise in searching doesn't automatically transfer into other areas, and this clumsy tool, which at best does little, and at worst produces broken code, is definitely one of their weaker efforts.
If Cotendo intends to force this option on their users without an opt-in (the press release doesn't clearly say), then that's one distribution network I'm definitely not using.