The short-circuit of Winston LiFePO4 cell  (see from 4:23)

Video shows the short circuit with a direct cable connection over 8 mm bolts in the terminals.

Due to the high current and the relative high resistance of the terminal bolts, the bolts will get extremely hot with temperatures above 1000*C.  This high temperature of the terminals will cause the over heating of the plastic around the terminal.

After some time, the plastic around the terminal starts melting and burning with a small fire. This fire is not caused by the battery failure but by the over heating of the terminal.

As the over heating continues, the temperature of the terminal increases and the meting and burning of the plastic case continues. However there is not any smoke and not an explosion.

Conclusion: at the short circuit, the cell does not emit any smoke from inside, does not burn, and does not explode.  Due to the high currents the terminals will be overheated and the plastic case will burn as a result.  The LiFePO4 is a safe technology.