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Everything is poisonous at some dose. These are evolved neurotoxins for fighting insects but in the doses humans use them they are just stimulants and probably neuroprotective. They do have downsides like causing cardiovascular stress and creating chemical dependencies though, but people often don’t die directly from caffeine or nicotine consumption.
PNG is fine for this. A palletized PNG on max compression would be smaller than the game and totally lossless unlike this. First you gotta take this image and map/quantize it to the original palette though to destroy the JPEG artifacts, which produce colors in between ones that would have existed in the game’s output.