Kerosene heaters that are not vented to the outside do produce carbon monoxide overtime in the home or area where you're heating with the kerosene heater.
The Kerosene heater displaces the oxygen in your home and can result in carbon monoxide poisoning if the precautions and safety are not followed.
Never go to sleep with a non vented kerosene heater on and open a window a crack to allow some fresh air into the room to replace the lost oxygen.
Failing to follow the safety precautions could result in asphyxiation and carbon monoxide poisoning.