Seriously? Any smoke from any electrical device is bad news.
Also is that sizzling sound on the video coming from the battery too?
Get it out of the house and, if you want to keep your shed, out of that too.
A battery is not like a mains problem where you can turn off the voltage and then investigate. There are no breakers here. There is no main switch. You are always working live. It may 'only' be 36v but, under short circuit conditions, can produce a lot of heat making current. As I understand it, once a lithium ion battery goes into thermal runaway it produces it's own oxygen