The ever-increasing boom in electric vehicles and energy storage stations highlights the emerging need to address the safety concerns associated with Li-ion batteries (LIBs). To this end, we conduct external short circuit (ESC) tests on six types of commercial lithium iron phosphate batteries in a sealed chamber, accounting for the state of charge (SOC) and examining the evolution of electrical, thermal, and jetting behavior. Subsequently, we establish a gas-based fault diagnosis method that caters to the reliability and promptness of safety warnings. Results indicate that the ESC process can be divided into three stages: rapid decline, flat/recovery, and instantaneous decline. The root cause of cell disconnections is the melting of the separator or activation of the current interrupt device by post-mortem analysis. The predominant vent gases emitted during the ESC tests include CO2, CO, H2, electrolyte volatile vapors, and alkanes, with elevated levels of CO2 than the other gases. Additionally, the peak values of temperature, current, pressure, and mass loss increase with higher SOC, while discharge time and capacity exhibit opposite trends. Notably, the gas-based approach proved effective in providing early warning signals for ESC events, and the warning time decreased with escalating SOC. Thus, our work sheds new insights into the fault diagnosis and prevention of battery management systems, offering potential methods for addressing safety concerns associated with LIBs.