Seen that happen before. That's why I ALWAYS charge in a battery charger, not in a scanner that has a limited charge function.
Likely what happened is one of the cells developed a short and the energy of that cell manifested itself as heart (and lots of it). The most likely time for internal shorts to develop is during charge which brings us back to my first paragraph.
I've seen it much more often on GRE/Whistler units, but it is possible for it to happen in anything. I'm not saying it's an inerrant GRE/Whistler flaw or anything. Maybe it's because the GRE/Whistler units are 33% more likely to have it because there are 33% more cells (4 rather than 3). Once one cell goes, it can trigger others to follow which looks like what happened, as the heat was concentrated right where two cells lie in the holder.
Your friend is lucky the heat stopped there and didn't spread to other things such as the table or what not. Always charge cells in a charger designed for NiMH cells (or the cell chemistry you are using). Did I mention that?