In the nearly 20 years I have been fishing Erie, I can't recall a single instance where I thought throwing out a drift sock was a bad idea. And I've been out in some ugly crap over those years. In most cases I still think it helps keep the boat in a way where it rides the waves better, and that is sideways. Most, if not all bassboats, will turn nose first if without a sock because the outboard acts as a drag and a rudder. As discussed, the transom into the waves is bad. Bow into the waves is a little better, but every boat I ever had still takes water over the front while drifting if the wave frequency/height is just right.
I have been out in waves, and it usually starts when they get to be about 5 feet or so, where there is a bit of back current on the back sides of the waves. The sock will briefly go under the boat as the boat moves backwards but quickly go tight again once forward momentum is gained again. I've never noticed this to be threatening either.
I very rarely have waves come over the side while using a sock, but often have waves come over the side without a sock while me trying to keep the boat sideways with the trolling motor, even on small local lakes.
I've never really had the situation where waves/rollers grew big all of a sudden then dissipated just as quickly. Every time I have been out in waves I should have not been out in, they always grew steadily for the most part or were like that from the get go. Rouge waves are very real though, and you usually hear those coming from a ways away. I suppose the original story here could have been a few rouge waves in a row, but usually they are single waves every once and a while.