Sounds like the rule is still up in the air. Or at least the language of the regulation, and so the interpretation, is.

You note the term "lithium battery" is not clearly defined. The functional, hazard, difference between rechargeable and non-rechargeable batteries seem unclear to me. I would think both have similar potential to cause harm. Not that I'm pushing for banning all of them. A little logic, clear thinking and consistent rules and enforcement would be, unfortunately, both nice and unusual.

I'm also not sure what they mean by the term "loose". Are they seeking to avoid an accidental, or on purpose, electrical short. Lithium batteries, and a few other kinds, concentrate enough energy that a shorted battery could be a serious fire hazard. Is this the point?

What if they are taped or otherwise contained in such a way that shorting is highly unlikely. A friend used to use small plastic caps, used as plugs to keep dust and crud out of air conditioning lines when they are shipped, as push-on covers. Being an AC man he gets them by the dozen for free.

Sometimes I wish the PTB would speak clearly and concisely about what their concerns are and what regulations are intended to deal with what. Probably too much to ask for.