My guess would be that there was an amount of metal dust on the threads due to the repeated screwing and unscrewing. The oil carried it down to the centre-post where it would short. However that still doesn't explain how the switch was bypassed. It may have complained about a short every time the button was pushed, but it shouldn't have gone into automatic bomb territory. I suppose it can only have been that the oil/metal gunk seeped below the seal, probably damaged by the force used to screw in the atty, and found the circuit board. A single drop is actually quite a lot.
Next time, WD-40 applied with a cotton bud. No free liquid.
Although if threads are that damaged you generally need to either re-cut them or throw them away.