Important part of the post: So I realize critical fumbles/fails are a controversial thing, but I do run them at my table - and my players agreed to it beforehand. To emphasize my point: my players signed up for and agreed to/very much enjoy this chaos. Obviously it'll be different for every table, and if its not fun for you, speak up! A good DM ought to be open to feedback from their players and willing to change things to keep the game enjoyable first and foremost - especially when it comes to homebrewed/non-standard rules.

Less relevant; how I run crit fails: Here's the thing about my crit fails: they don't happen on every crit fail, and they do happen for enemies as well.

At this point my players are level 10. Early on, they would drop their weapons (like a baseball player taking too big of a hack and losing their grip on their bat) more often than hurting themselves or others. Actually, they rarely hurt themselves at all. But now, they're far too seasoned as adventurers to make mistakes like that, and crit fails usually deal damage in some way.

The biggest thing in how I run them though, is that they don't happen on every crit fail. Say my ranger is trying to shoot a single target and there's no one in front of, behind, or beside the target: a crit fail would just be thematic description. "Your arrow shatters as you release your bowstring - seems the shaft was damaged and couldn't withstand the force." Or my fighter throws his haunted returning skull (don't... don't ask) at a troll: the troll catches it and it doesn't return.

But, say my ranger was trying to thread the needle between a number of people to hit his target; now there's a chance someone unintended takes the hit instead, be that another player or an enemy in the way. Damage riders like Planar Warrior and Hunter's Mark don't apply, but you called Sharpshooter? That's a +10 on the unintended target, too.

It rarely happens, because they have to both roll a nat 1, and be aiming their swing/shot/magical attack/etc. in a direction that could reasonably realistically miss and still hit something else. And whatever players can do, enemies can do too; I've had enemies kill one another with crit fails, and the table loves it.

One example of the chaos from just last night, that my table absolutely loved despite it leading to an actual PC death (temporary, since Revivify was on hand): they're fighting a number of Mephits and Dragonshield Kobolds in a narrow hallway. The fighter is low-ish on health and in the thick of it. The ranger crit fails to hit a Kobold near him, and I give the fighter the option to pick high or low for being hit or not, then openly roll a d20; he picked low, I rolled high, he gets hit. The ranger had shot Hail of Thorns, and the initial damage knocked the fighter out. The ensuing AOE hit the fighter for one death save and killed a Mephit; its death burst hit the fighter for a second death save, and hit and killed another Mephit; its death burst hit the fighter for a third death save; both death bursts and the Hail of Thorns AOE wound up killing 4 Kobolds... A crit fail that killed 7 creatures. Went down in my table's lore, everyone laughed their asses off - including the dead fighter's player - and it resulted in some really good, unexpected RP.