This is worth some discussion - and a reminder to many of us for what we are often carrying in our hands and pockets. One of these batteries exploding is a very scary thought. Hopefully, we will never read about one of us experiencing such a nightmare. As Don had pointed out, the fumes that are given off after an explosion are extremely toxic. If one of these cells happens to vent (and doesnt kill you first from the fragmentation) hold your breath and get far away.
A few tips:
Check your cells for the potential of future dead shorts. Inspect the insulation for damage that might expose the body of the cell. If the cell has a protection circuit, inspect the top for any splitting or detachment of the protection circuit. Inspect the body for any deformation, such as dents in the cylinder, or the tops or bottoms being pushed in. Discard any damaged cells. If a cell is becoming warm in your hand after dropping it, Get rid of it IMMEDIATELY!
Always carefully inspect your flashlights before each use to make sure that no potential of a dead short might exist. Check that the spring/plunger in the tail cap (and driver if equipped with a spring) have not been bent over where it might make contact with the body. If a battery is to long for the body, dont use that battery. Look for any other areas that might create a dead short inside the light. I usually completely disassemble a new flashlight to inspect it for any weaknesses. If your flashlight body suddenly starts getting hot or smoking, immediately toss it far away. The dead shorts that I have read about usually happen after the light has been dropped or while changing a battery.
If you are using a multi-celled flashlight, always ensure that your batteries are of the same brand, model and age. The cells should be a matching set. In other words, they should have the same charge and discharge characteristics. The beginning and ending voltages should all be the same during use. If not, dont use them together. If done correctly, you should check the cell voltages before and after each use to detect any potential failures... not just during initial trials. After discharge, my cells usually wind up being .00-.02V of each other.
A lithium battery that does not fit snugly inside the battery tube of a flashlight while being used in a high impact environment (such as for a bicycle) is a disaster waiting to happen. When allowed to bang around in the tube, I have had drivers crack and short out as well as protection circuits crack that could have proven lethal. Lucky for me, they just went up in smoke. These were with lights that had very little play inside the tubes but still allowed the battery to move. It doesnt take much movement at all. Use paper or tape around the battery to shim it so it fits snugly.
Remove the batteries when traveling. Or at the very least, (if this works with your model) lockout the tail cap by unscrewing it a turn to prevent the circuit for completing.
Dont keep your entire collection of lights loaded with lithium cells while you store them. Why increase the odds of a potential disaster?
Use a good quality charger that will not charge your batteries above 4.20V and always be close by while charging is under way. Unplug the charger and remove the batteries if you need to leave and recommence charging when you return.
As pilots, we are trained to recognize potential disasters before they happen. Preventative maintenance in equipment is often key. It usually takes only a few small steps to prevent injuries or fatalities from happening during our daily lives... even with something as simple as flashlights.