i had a Shorai (that didnt fail like yours, but was also destroyed).
what happens, at least with the Shorai, but probably with all LIFePo batteries, is that during use only the cells connected to the posts get charged. The cells in between the posts do not get charged directly since there is no battery management gear in the battery case. so, you end up getting a 'gradient' of capacity across the multiple cells in the battery, where the inner cells are not as drained/charged as the other ones.
so, what may have happened is the battery was drained significantly and then overcharged, and because it was very small in comparison to the original battery, resulted in a lot of overcharging/heating in a localized manner within the battery.
disclosure: im not a battery engineer guy, just someone who asked a bunch of questions to the shorai guys when my battery borked itself.