How reliable is the vendor you got the batts from, maybe they are counterfeit or clones. The charger just charges so unless the charger is defect I would more lean to bad batts. My
batteries have never emitted a smell and I use a old LUC 2 bay charger. Its a bit weird that there is a smell and they fluctuate in the charger like that. One quick test is read the output on the back of the charger then divide that into the mAh of the battery to see how many hours it should take to charge that battery, most are 400-500 mAh per hour to charge.