I am unable to drop a direct link at the moment, but if you click on the link below for my blog, go to my Deeper Understanding of Batteries Part TWO which explains what a protected battery actually does.
Protected vs. Unprotected Batteries
There is a common misnomer in the vaping community that a protected battery is safer to use than an unprotected battery. There is a belief that a protected battery will prevent you from over-drawing your battery and prevent it to explode or vent gas. I'm not certain where this belief started, but it needs clarification. A battery labeled as "protected" does not always prevent you from applying a higher current draw than it is capable of handling.
The term "unprotected" is vague and often misunderstood. It can mean a "safe chemistry IMR or hybrid" that doesn't use a protected circuit, or an "unprotected ICR battery". Unprotected ICR batteries should NEVER be used in a mod; they should only be used in less demanding applications such as flashlights or laptops.
The protection circuits in batteries vary from manufacturer to manufacturer, but primarily prevent you from over-discharging (using the battery past its minimum charge rating) or over-charging the battery. The "protection" moniker is not all-inclusive either. Some will provide just over-discharge protection, others have over-charge protection, and in some batteries over-current protection.
You will have to hunt down the data sheet from the battery manufacturer to find exactly which protections are provided, or hope that your merchant has this listed online. Protected batteries are quite often longer in length than their unprotected counterpart. This is due to the additional circuitry that is embedded in the battery. Confirm measurements before you commit to purchasing.
Now, this said, lithium ion batteries have what's called a PTC or Positive Temperature Coefficient circuit. This is built into the battery just above the positive terminal and is present regardless of any "protected" labels. The PTC is designed to raise the resistance of the battery as the temperature of the battery rises.
The theory behind PTC is that as the resistance goes up, the current draw from the battery goes down - Ohm's Law. This helps prevent most accidents from becoming catastrophic, but it should not be relied on. The PTC is designed to be unobtrusive and you can still over-draw the battery if you aren't paying attention. The PTC circuits can also fail if exposed to static electricity or from a faulty charger. When a PTC fails, it often fails in a position which allows you to continue using the battery without fault. --
Deeper Understanding of Mod Batteries Part 2