The official training video by the FAA outlines that crew should extinguish the fire with onboard equipment and keep it cool with water to prevent it from thermal runaway again. In one outline, FAA doesn't endorse putting it in a bag or touching it any further than it needs to be, and another in response to commercial "FAA approved" products for lithium battery fires, does not endorse nor discourage using such products.

You can't smother a lithium battery fire because it's not using atmospheric oxygen in the first place. The only options are containment or cooling.