Yep, you were lucky you did not get a short.
The failure of a laminated Lithium ion cell can occur in various ways (internal fault, overcharging, over discharging, poor assembly, external damage, over current, over temperature etc). Casing the cells in a hard plastic is one of the best ways of protecting the soft pouch assembly that is easily damaged by mechanical abuse. Out of the hundreds of battery designs I have been involved in the number of uncased laminated Lithium ion designs is.. zero.. because it is mostly only the hobby market that use them in user replaceable applications.. this is because, in general it is a bad idea to allow uncased cells to be put in the hands of the general public... but we all know we use them in aircraft due to the lighter weight. In cars it is vital that we maintain the hard case.
In this case photographed it is a poor design of the wire exit that is to blame, you cannot say that hard casing is a bad idea. The designer of the casing should have highlighted this as a weakness in the design and addressed the weakness by creating insulation between the wires or providing some strain relief.
I feel your financial pain - There is really not a lot you can do about it apart from insulate the wires as best you can, discharge the pack and then take it to your local recycle centre. Do not attempt to post/ship it to anyone as it is damaged and doing so would contravene a number of international shipping regulations.
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