> protect circuitry (which is inside the battery package) will most likely cut power

I wonder if that's responsible for the experiences folks had way before waterproof phones were introduced: they would drop their phone into water, it would shut off and refuse to boot for a significant amount of time (enough to send them shopping for a replacement) and then they'd try it a week later only to find that it works fine. Accelerated by putting it in a bag with rice or other desiccant.