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Wait did they threaten you with a hat or with a processor?
Anyway step 1 is buy a fire extinguisher. Not great for the battery, but it will keep it from spreading. Is the laptop plugged in with the spicy pillow, or is it just sitting there completely unused?
5950?.. Is that... It's that a model of Smith & Wesson?!!
I'm assuming they meant 5150. It's code for being involuntarily committed for mental health treatment
If it's worrisome do you perhaps have funds to purchase them a new battery? They sound very cheap and careless to be eating moldy food so maybe if presented as a free thing for them maybe they'd go for it? Helps if you can do this around an actual holiday so it seems less like you're trying to exercise control over their stuff. Of course if they're just a careless control freak (and being cheap has no actual part in it) even this could be received with hostility I suppose. Even if you have no experience you can often find battery replacement videos on youtube if it's an internal one by searching the model and "battery replacement" though be wary some may require tools like special screw-driver bits which may drive the cost up (though some seller MAY include things like that with the battery).
Otherwise a fire extinguisher and working smoke alarm sound good to me as alternative purchases.
Batteries are cheap, fire extinguishers are cheap. If they’re not willing to get rid of it (it probably is working fine tbh) then get a fire extinguisher and buy a replacement battery.
You don’t need to convince them of anything, just fix the problems.
E: also, as someone who works extensively with and repairs electronics and has encountered lithium battery fires firsthand it’s honestly not as likely as the internet makes it seem. Still dangerous, but not as imminent as you might feel.
Can you put the laptop in a metal container, maybe outside?
It sounds like it's being actively used by someone else who is adamant that there's no problem, so anywhere OP might put it it won't stay there for long.
Is it plugged in and working? If so you can probably remove the battery and it'll work the same as it did before removing it. Instead of calling it a safety concern some batteries expand to the point they break the trackpad, use that as an excuse.
if nothing else at least test your smoke alarms