Is it okay for rabbits to eat their feces?

Yes, it is normal for rabbits to eat their droppings, although rabbits don't really eat their feces: they eat their cecotropes (also known as cecals or "night droppings").

Feces are round dry droppings seen around the rabbit's territory and in the litter box. A rabbit might sometimes sniff or nibble at a fecal pellet, or might accidentally take on in its mouth while eating cecotropes, but not really eat them.

Cecotropes are often not seen by humans because they're taken straight from the anus, but they look like dark small mushy blobs, sometimes in grape formation, and sometimes they're very smelly. Cecotropes are packed with nutrients that rabbits need to survive. Cecotrophy is a process of re-digestion that allows the rabbit to absorb all the nutrients and get the most out of its food. Rabbits eating cecals is basically the same idea as cows chewing the cud. Baby rabbits eat their mother's cecals as well as drink her milk. Rabbits will redigest their droppings up to as much as 12 times for remaining nutrients.