The actual regulation for passenger carryon is at the very bottom, as an exception to the general regulations.

The problem is twofold. First, the TSA has used their typical “Obey or I’ll thump you” approach. The schoolyard bully is rarely persuasive, even if they are obeyed. So people already have the wrong attitude, and it shows in the incoherent and ignorant raving about this regulation. Second, people are genuinely ignorant about the real fire hazards, and are likely to be unable to grasp what is safe or unsafe. Having the TSA bullies making this decision won’t help understanding, but seems to be the path of least resistance. Can you imagine the bureaucratic firestorm that would result if NTSB were to publicly state that TSA inspectors are too stupid to determine which batteries are small enough to be safe?

This is more than a “suspected” cause of fire. It is a confirmed cause of at least three different aircraft fires. In each case the battery caught fire and is the known cause of the fire. Fighting fires on aircraft is very difficult, so the long established practice is to keep significant fire hazards off the airplane.

Doc, the safety recommendation for loose batteries is that each battery be put into an individual plastic bag or case. This protects against accidental short circuits, and those are the primary cause of fires for the small loose battery.