Is it a bad idea to install ADFS on the AD server itself?

It should be fine to install on your Domain controllers. As long as sane lookup caches (for DNS) and leases (for DHCP) are had, and you have a proper amount of DCs for your environment (the answer is never "one DC"), ADFS should not present a huge amount of load.

Yes its a supported configuration to have AD and ADFS on the same box so no problems there. But as the general preference is to have AD roles on dedicated servers, its not an encouraged configuration.

When you upgrade the AD in the future, you'd have to do in place upgrades of this server instead of demote/promote new DCs.

If you are also planning this server to be internet accessible, then its also not a good configuration from a security perspective unless you plan to have ADFS proxies too.

So if this is a very small environment where they have no other servers or means of even using virtualization to host roles on different OS guests, then yes you can do it.