Not really any more reliable than any software controlled volume.it's 'physical' and so I don't worry about sudden max volume surging through to my speakers.
The relays are controlled from a microcontroller, and the "state" (volume) has to be remembered when powered off (and not corrupted/lost while powered on). It is no less likely to forget what the volume should be than any other system not consisting of an actual potentiometer.
In an ideal world in this type of system, the volume "value" should be checksummed, and revert to minimum if the checksum doesn't match. I'm not sure if the designers of these types of devices are that careful though.
The best defence from software controlled volume, is to use attenuators on the input to the amp which limit the maximum volume to a safe level for your speakers - even when the volume control is set to max.