This is one of the ways a lithium ion batteries die, but its not the worst way.
As batteries age their internal resistance increases which causes higher temps which cause higher resistance and so on (thermal runaway).
The first safety built into consumer lithium ion batteries is a device that opens the battery circuit to stop electrical flow to the device. I believe this is around 140f - 150f.
Secondly and its not uncommon, is to also see a battery that is "slightly" swollen when it dies. Sometimes you can even notice it without measuring it. This is another safety device that opens the circuit to stop electric flow when the batteries internal pressure reaches 100-200 psi.
The third safety to keep you from dying and what you experienced is a battery swelling up like a balloon. This is only common enough that we've all heard about it across various devices but unlike the first two we all haven't experienced it. The metallic wrapper on a lithium ion battery is designed to make room for the gases in the event of an over charge, charging from an over discharged state and/or internal short circuit. You likely checked 2 of those boxes. That wrapper is designed to hold 300-400 psi after dramatically increasing its size to contain the gases produced at the battery overheated. You battery likely was at the bare minimum the charger would allow it to charge from (once it drops too low it won't charge it anymore) due to lack of use, and its age/wear had mild short causing discharge through the separators (barrier between the cathode and anode).
There is a little bit of irony at this point because if your MBA would have reduced its performance (power consumption) to account for the battery (say for example like Apple did with the iPhone when everyone was calling foul) this MIGHT have been prevented since internal battery shorts are something that happens over time. I digress....
Finally, its last "safety" is to prevent an explosion. To do this there is a vent built into the metallic wrapper that will allow a controlled pressure relief (like a water heaters T&P valve) when pressures exceed 450-500 PSI. Generally this relief in pressure prevents the lithium from igniting.
All bets are off if you puncture the battery. A spark could cause a fire, and a laptop battery could cause serious injury or property damage. You are best off throw the device on the drive way and cover it with something that won't burn until it cools off, then let it sit a couple more hours.
The main concern is temperature. All the safeties are built around allowing the battery to cool to prevent the the lithium from igniting. Because of that though the battery can be scalding and cause severe burns with direct contact so its more of a concern for a device in your pocket (iPhone) or a wearable like the Apple Watch.
When a battery is discharged and the device turns off there is plenty of power left in it. iPhone for example will have 3volts (fully charged is 4.2volts). If it drops too far past that it becomes too dangerous to charge because of the internal resistance and heat build up. Devices will report the battery has failed when plugged in or or not do anything at all.
My experience from all of the above comes in here. If you use an external power source to slowly charge the battery you can bring it back to the point the OEM charger will work again. It something I do at work on occasion for handheld communication equipment that people let die then put it on a shelf for a year(s). I only do this to batteries I know have low cycle counts and should be usable if they would have been properly maintained. Most of the time it works just fine, occasionally it fails because I'm not patient enough and don't limit current (500mA), more rare the battery will swell up a little then go open circuit, and couple times they swelled up like balloons. I due this in a professional fire proof container (tool box lined with duct tape) but never had one vent or explode yet.
TL;DR
This is one of the few ways a lithium battery will completely die. A battery that is old + worn (many cycles) + been self discharging for a long period of time = recipe for more catastrophic battery failure. This is common with laptops due to how people use them. If anyone has a laptop they have to keep plugged in because the battery only last an hour I would highly advice you remove/replace it. Especially if during that hour of use you can feel it getting HOT.
