Think of these batteries as high intensity spontaneous fire sources. Each is a bag of nasty chemicals and gasses. In the aircraft baggage section it will expand and contract much more drastically than in the passenger area. On many such batteries there is a thermistor sensed safety circuit that will separate the battery from load if there is an issue there. But if the battery or this circuit is at fault it will go off. So where do you want it to burn - in the cargo hold where it will burn the whole plane up? Or perhaps in the luggage bin right adjacent to the thin aircraft skin (burns=rapid decompression and likely disintegration) - or in your bag under your seat? At least there you know what it is and can likely contain it - but everyone would have to get oxygen pretty quickly. I don't think airlines really understand how these batteries work - and don't work if manufactured wrong (hand assembled in China). I work with them a lot and have seen assembly faults - one just a few weeks ago that went with my boss to Japan and back. The battery remained good- just disconnected from its internal safety circuit due to shock or something. So this would likely mak/break contact during a flight. Any outgassing =hydrogen and a spark = boom. But it wasnt outgassing and was with him on his flights. We all have heard of these burning - this is usually due to something making the battery outgas - short in protection circuit, puncture in battery casing due to poor enclosure, or overcharging.
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