It sounds perfectly acceptable to me in casual, informal spoken settings. I would even say it is a rather gentle way to turn down a proposal and to convey your lack of enthusiasm for it.

You could consider “bof” as an equivalent of “meh”: really nothing to write home about. Something that leaves you indifferent, not interested, not impressed.

It’s an interjection. It’s not rude, just very informal.
It’s used A LOT in French. And often you shrug to accompany the word.

-“Ça t’a plu, le film?

-Bof. Pas terrible.”

“Ça cassse pas les briques” was another way to… elaborate on the “bof”.
My grandma would have said “ça casse pas trois pattes à un canard”.

So… “Meh”.

Yes in this sentence, to me "bof" is used as an adjective.

Je suis allé voir le film mais franchement il est bof.

In your sentence, any adjective could be used in place of "bof" so it makes sense to see it as an adjective to me, more than an interjection.

Le film X, pas terrible.

Le film Y, génial !