> breeding blanket is entirely contained inside a vacuum vessel, so there isn't any oxygen to react with

When the vessel works. If the vessel breaches, that lithium could ignite. Note a showstopper. But I suppose a risk to be thought about by the engineers (probably not by policymakers).

Commonwealth Fusion Systems plan to use lithium in salt form FLiBe, a molten salt made from a mixture of lithium fluoride (LiF) and beryllium fluoride (BeF2). It does not violently react with air or water.

https://en.wikipedia.org/wiki/FLiBe