Not sure how UL defines fail-safe but I'll give you some very simple examples:
In colder climates the valves that control steam or water to heating systems are arranged in a fail-safe manner - so that if the control or control power is lost the valve opens turning the heat fully on. The "safe" mode, in this case, is heat on so that freezing is prevented (causes lots of damage) - and one accepts that the building can overheat to an unpleasant but not dangerous level.
In many electrical circuits current flow is either on or off. The problem - the "off" condition might be unintentional - the result of power failure, wire breakage, component failure. An alternative is to have some current flowing all the time - a supervised circuit might be one description - with low current possibly indicating "off" - a higher current indicating "on" and currents at low levels or zero suggesting a failure.
Again, not sure what UL has to say - just sharing relevant thoughts.