The sad part is I can't recall any instances of this happening in D:OS.
Cursed Revenants in ACT 3. The trauma they inflicted upon me because of the BS fires spawning still lingers years after, a wound that never healed

But yeah the fires at Waukeen's Rest are just terribly done and it's the worst remainder from Early Access that wasn't tweaked since;
- Infinitely spawning fires if you try to put them out
- Trying to put them out is even worse because of the over-aggressive fire-spawning script so you actually end up creating even more fire
- And by trying to put the fires out you're actually creating electricity clouds
Which is why I just stopped caring and chug a Fire Resist potion to walk through it. Thankfully however Larian made it so that the fires finally extinguish themselves after saving the people and taking a long rest. Better anything than nothing I suppose, but I still wish they would properly make this place burn. It's a huge mistake the way it's currently done.