Lion and lipo cells already contain oxygen in the form of oxidized metal. If a lipo fire occurs it will steal the oxygen from the oxidized transition metal inside the cell. So much like thermite once that sucker goes there is no smothering it, at least not with water or lack of air. The best you can do is try and contain the heat and the flames in some fashion and have either a type ABC or type BC fire extinguisher handy. The lipo bags are meant to try to contain the fire and heat to some extent but if youve ever watched people on youtube testing the effectivness of lipo bags most of them leave a lot to be desired. Thats why I personally use an ammo can with a small hole drilled in it. Worst case scenario I can yank the plugs and carry the lipo into the yard away from everything before it fully goes up or if I happen not to catch it in time at least the fire and heat will be contained inside the can and the can is sitting on a piece of wood that if it were to get discolored from the heat then I can simply replace it.
Hes a video of a lipo burning under water.