Batteries have some equivalent internal resistance, so even if you short the output, the current does not shoot to infinity. In your case, with a dead short across the battery you would measure 0 volts (ohm's law: if your short is nearly zero ohms, you would read nearly zero volts across it even if there is a lot of current flowing). The amount of current flowing would be very high, depending on the type of battery. This would cause your terminals to heat up. It is possible there were many amps flowing and it is possible that the battery heated up inside. If the internal guts of the battery heat up enough, and quickly enough there may be gases generated inside that can cause the battery case to blow open. This sort of explosion can be dangerous and obviously hard on the battery!