Issues (Other Than Disk Space) For Using Operating System Partition
For a production solution it's better to put OS, data, log, and tempdb on different volumes, even if those volumes share a single disk, storage pool, or SAN array.
This limits the blast area of running out of space, and provides separate visibility to the different IO types through the Windows Logical Disk performance counters.
However, it works fine, and is absolutely supported to put everything on C.