[below refers to
rechargeable Lithium cels and batteries. Non-rechargable Lithium cells are chemically different, and don't carry the same risks (as far as I know!)]
Am I right in thinking that the wrong type of charger can quickly diminish battery life?
Yes, and this can cause (or at least trigger) battery fires
Modern rechargeable Lithium cells don't need oxygen from the air to burn, so you cannot put them out by using conventional firefighting methods nor extinguishers (they will burn under water, for example). Energy stored in the cells adds to the danger, although "flat" batteries can also catch fire.
The biggest single trigger is physical damage to the battery, such as bending or puncturing it*, however electrical mismanagement can also cause fires. Using adapters between battery systems is risky, as the battery protection circuitry is sometimes in the pack (e.g. Ryobi, and this is good), but sometimes in the tool itself.
Furthermore, the risk of fire doesn't diminish much as the battery ages (wears out). Also, the combustion products (smoke, etc,. given off) are highly toxic. In electric car fatalities involving the battery pack catching fire, the victim(s) usually die from toxic fumes (i.e. actual poisoning) before the fire reaches them. In a car, the combustion products will kill in <25 seconds.
Because of this there is really no such thing as a "small" Lithium battery fire.
I recommend the "StacheD" channel on YouTube for up-to-date information on how firefighting services are addressing these issues. The presenter, Pat, is both a seasoned firefighting professional and an expert in automotive battery design (his past career). He is a campaigner for better firefighter training and equipment, and for tougher laws in the USA, particularly concerning the need for Hazard labelling on vehicles transporting Lithium cells or batteries. Presently they are not required to carry any safety labelling at all.
Sorry to sound alarmist, but what I have learned has caused me to be extremely cautious in handling, storing and charging my Lithium-battery kit, and particularly my cordless tools.
E.
*This is why airliines now say (in the pre-flight safety briefing) that, if you drop a mobile phone down the side of the seat, you should call a flight attendant to help, and not use the seat's reclining mechanism to try to get better access - crushed phones catch fire.