Have made many(!) potato sacks for gifts and always include instructions for baking with bag. No one has ever reported a problem except for my sister who caught a potato on fire. She left it in for 25 minutes and took a nap while waiting. Duh!
I use unbleached muslin(washed) for inside, 100% cotton batting and well washed 100% cotton for outside. I prefer using Idaho potatoes. The sacks make the best baked potatoes ever. Don't forget to wrap potato in paper towel before inserting into bag and be careful not to puncture the potato skin.