I can understand the problem with Lithium Industrial batteries (big ones) and I only once in my 74 years witnessed lithium batteries in a camera bag heat up and smoke in a wedding photographers camera bag while he stood at the counter in a camera store.  His batteries heated up and did some bag damage.

However, this was caused by the fact that he was an idiot.  There is a reason why camera companies in the past had plastic caps on all of their batteries so that contact of the battery terminals would not hit against the terminals of other batteries in the same spot in the camera bag.  Safety was the issue but if the batteries were stored right then the problem would not have happened.  I’ll say it again.  The photographer was an idiot.

I have seen double A (AA) batteries in a camera bag heat up as well because they were stored loss and contacting the terminals of other batteries in the bag.

This is why companies like Thinktank as well as others make battery holders that keep the terminals away from each other.

Would it not be simpler for the FAA to issue instructions on how people should store these batteries? Of course, it would.  Would there be less in air mishaps if the FAA enforced the number of hours a pilot can fly before they have to sleep in order to fly again?  Of course, it would.

After conducting a series of safety tests, the FAA is recommending that all airlines ban cameras and other electronics with Lithium Ion batteries from checked baggage. The agency believe the risk of a catastrophic fire and explosion is too great.

Source: FAA wants airlines to ban cameras and other electronics from checked bags: Digital Photography Review