The bulging battery on its own isn't (much) more dangerous than a normal one. The problem is once the device splits open, the battery is no longer protected and much more likely to get accidentally punctured. A regular battery combusts when punctured, and the bulging battery would vent that gaseous content (which IIRC is Hydrogen) and then combusts, which makes for a larger initial fireball.

I used to deal with puffed batteries a lot and went through some basic training on safety and how to ship devices with them for repair. We only ever had one battery fire, it was a from a normal battery, and it happened when someone shoved a t-pin through the headphone jack of an iPod touch because they thought it was a reset pinhole.