What’s “KG” in this context? As in, serious question because I can’t parse that sentence. Is it supposed to be “kg”?

Thermal runaway is a contagious failure mode.

My thought was that a failed flywheel would be locally catastrophic but as long as you are not building homes right next to them, it would be safe for the surrounding community and not inconvenience or put civilians danger.

Typical flywheel energy storage relies on enormous mass rather than high rotational speed. I don't think that flywheel storage is necessarily hazardous.