I've been to Oaxaca a number of times, most recently about three years ago, and a relative lives there. I can't speak to the current Covid situation there or in Mexico generally, or obviously what it will be in August. If your safety concern is about crime, I wouldn't worry about Oaxaca. Apart from pickpockets, who are an issue all over Mexico, the city has very little crime and less violence. You're probably safer there than in any US city of comparable size.
Oaxaca has a higher percentage of indigenous people than most other parts of Mexico. It was home to the Zapotecs, whose ruins (Monte Alban, Mitla, Yagul, etc.) are among the best in the country, long before the Aztecs and Spaniards arrived. The surrounding villages specialize in amazing pottery, weaving, and other arts. Each village has a weekly market (on a different day). There are beautiful colonial churches in the city and several villages. The museum in Oaxaca city, formerly a monastery, traces the prehistory and history of the area and has artifacts from one of the ancient tombs of Monte Alban -- and there's an audioguide in English. Next to it is a botanical garden with examples of what may be the world's oldest variety of corn. Oaxacan food is well known, including seven kinds of mole sauce.
I've been to Cozumel, Playa del Carmen, and Tulum. I'd like to visit Merida and Chichen Itza. I'm sure Cancun is a great winter beach destination, but I'm not sure I'd want to be there, or in the Yucatan generally, at sea level in August. Oaxaca is in the mountains, the city at about 5,000 feet. August is warm but not too hot, with a brief thunderstorm most afternoons which cools the place off.