The fire in the overhead means the power bank wasn’t being charged at the time
No but it likely means that the battery was charged to 100%. Depending on the battery charger it may be >100%.
Note that 100% is not the physical limit of charging . That is just the charge when voltage reaches a certain nominal number. Say 4.2V for certain Li chemistries. It is easy to charge beyond that - especially when the charger is inaccurate with the 4.2V limit and its 4.2V in reality is 5V.
There are forums which discuss how to overcharge lithium batteries so they carry more charge.
Poor quality Li batteries when repeatedly charged to 100% cause lithium tendrils or dentrites which creep along and eventually short circuit the cathode to the anode. It does not take much the distance between the cathode and anode is often in the millimetres.
The immediate solution should be that all power banks need to be
Banned.
There is another solution which is batteries can be carried in cabin with a very low SoC - maybe less than 30% and not charged unless it is a built in part of a recognised /accredited device - such as laptop, mobile phone, tablet. But then that requires checking at the gate and more delays.
all power banks to be carried in a ‘safe box’ which is fire proof.
If an electric car with the battery in a structural casing can burn down, no "safe box "exists.
The alternative is to ban power banks completely. Airlines and passengers will need to make a choice.
Yes

. The mantra that the airlines like to parrot "Your safety is our first priority" is already hollow, no need to hollow it out some more.
and you're on a short flight with little time to charge?
hence thats why many people will bring on batteries fully charged - see first comment
......
Also while we are there liqour is flammable....and on an international flight, there may be lots of DF liqour