It is not by the manufacturers. I can show you pictures of the results if you do it wrong. While it can be done safely, it is beyond common knowledge, so if you want to do it, watch a few of the YouTube videos and make sure the follow the safety recommendations, and know the laws. To me, running Propane through a desiccator is not worth the effort.
The "Not Refillable" label means that they may not be refilled commercially. You, as an owner can refill it, but TRANSPORTING it is illegal. If you are caught on roads with refilled "Not Refillable" cylinders, you can be subject to a $10K fine and 5 years in a Federal Pokey. I have one seen one instance of a person being charged Federally for violating the DOT rules though. The reason for the prohibition is that the 1lb. cylinders don't have the same safety margin and if they rust internally, they can explode. I have worked on three cases where such did occur here in CO so far. Factory filled propane is dry, meaning no water. Bulk tanks that you get for your propane grill, and the Propane that goes into those from bulk plants is NOT dried. A few fillings and you can corrode the interior of the tank.
As to your original question, review this page: https://www.colorado.gov/pacific/cdp...-and-canisters
I am a certified Propane Handler as well as Line and Appliance installer and regularly investigate Propane accidents for Government Agencies, Propane Suppliers as well as Insurance companies. I have been employed by DOT and Homeland to provide Safety Protocols related to this, and other Propane safety issues, so I am not just a common person on the subject. I hope that helps you make an informed decision.