First: don't drill into walls from the outside if you don't know what's going on. True for all kinds of insulation. Wet polystyrene is also a disaster, albeit being not as fiery.

Second: don't drill into pipes. For that there are regulations to. Where are conduits supposed to be located and therefore you know where (not) to drill. If it still happens it's another human error and in my opinion as dangerous as nicking a powerline and creating a small glow (unlikely today thanks to gfci and such).

but to the larger point you made: i am sure that if you put a lot of straw in a pile and add water and wait and settle that it will generate heat. Composts come to mind. That takes a lot of thickness for the heat to overcome thermodynamic equilibrium and start to burn. Thr straw in the wall is sealed. But not for heat but air transit. As you can see in the picture of the article that wall has a thickness of about 50?cm, which is not enough to create that heat pile effect when wet. The heat would be dissipated, I am sure.

And what I am even more certain of is German regulations being overly thorough to the point of being anal. There is no way that this hasn't been tested to death especially with the strong chemical company's lobby here.