• AE2 works perfectly fine without OptiFabric. And vice-versa.
• Only crashes when rendering an item. It crashes when going to the 2nd page of the creative inventory:

The game crashed whilst rendering item
Error: java.lang.NullPointerException: Rendering item
Exit Code: -1

• Full Crash Report here: https://pastebin.com/ig816xu5. Seems to be an item called "sky_compass" which I assume is the Meteorite Compass.
• Shaders being used doesn't matter, crashes anyway, crash report done without any shaders selected (Off).

Mods used:

• fabric-api-0.19.0+build.398-1.16.jar
• appliedenergistics2-fabric-8.1.0-alpha.6.jar (https://www.curseforge.com/minecraft/mc-mods/applied-energistics-2)
• OptiFine_1.16.2_HD_U_G3.jar
• optifabric-1.4.8.jar

Side note: Forge OptiFine and Forge AE2 work together just fine.

As an experiment, try with Patchouli installed. I have a feeling it's the same issue it had, and if present it will apply the fix it needed automatically.

It does fix rendering the item in the inventory/hotbar/hand/offhand! However it crashes when placed on the ground.

The game crashed whilst unexpected error
Error: java.lang.ClassCastException: net.optifine.override.ChunkCacheOF cannot be cast to net.fabricmc.fabric.impl.client.indigo.renderer.accessor.AccessChunkRendererRegion
Exit Code: -1

Full Report: https://pastebin.com/piSZJnXz

Used with Patchouli-1.16-40-FABRIC.jar.

Note: the first time i tested, rendering had some issues, the Meteorite Compass' hand looked really weird, unfortunately I didn't have my recording program running so I didn't capture it. The second time i ran Minecraft, it rendered correctly in the inventory and hands. Screenshot below (Running SEUS shaderpack):

EDIT: This is what it looks like on the ground without OptiFabric. Entering this world with OptiFabric causes it to crash in the same way as above.