It it safe to connect Li-Ion batteries in series and then in parallel?
You will have some success with this for sure. It will 'work' but it is prone to error. Li-ion cells are dangerous. 

That being said, to answer your question. Is it a valid circuit: Yes. Two pairs of 4s batteries connected in parallel at only the bulk nodes will work for sure. But you want to make sure that the bulk voltages of each of the packs is pretty close to the same when you hook them up. If one is 16.81v and the other is 16.73v well that is close enough (someone will complain that I said that but I can explain why if it comes to that, but that wasn't the question you asked so I won't get into it yet.) 

Are there any caveats? Yes, What is monitoring the state of charge (SOC) of the individual cells? Does each 4s pack have its own battery management system (BMS)? You do not want any one of those batteries to go below 3.0v more or less. They will all reach 3.0v at a different time because of small differences in the cells. So that is a caveat. 

This is also related to your next question: Will the bulk capacity be the same as the sum of the individual capacities. No, it won't. If you are indeed stopping the discharge of the unit when any one of the cells gets down to 3v then the capacity will be limited by the capacity of the weakest cell in the pack. Also it will not be at a consistent 14.4v. The voltage will change as the SOC changes. There are quite a few unknowns in your statement so it is difficult to give better advice.