I think it’s fine - at one point it was considered to be cellulose (like carefesh) and not just paper - but it never did say on the packet and has always been much better quality than carefresh. And I believe it may have changed in recent years so may well be paper (or a higher quality of cellulose).
All paper goes through chemical processes - even toilet paper - to convert it from wood to cellulose or paper (cellulose is wood pulp I think).
My preference for something like Fitch is that it is just paper - recycled food grade paper. And as I understand it, paper goes through a lot less chemical processes than cellulose so likely has less residue. But that’s just my opinion. I’m not keen on Carefresh personally and find it has fine dust and some hamsters have been allergic to it. But Kaytee clean and cozy has been used safely for years. Some people prefer it to Fitch because it is a bit softer.