I certainly wouldn’t keep it on a wood shelf ;-).
Swelling doesn’t directly relate to igniting, as far as I know. You certainly want to dispose of it safely so call your city to see how you can do this. You could measure it to see if it still has any charge. If it doesn’t, then its probably safe to dispose of it at your local hardware/electronic store that recycles batteries.
Of course, you could have some [https://www.google.com/search?q=li+ion+battery+chopping&rlz=1C5CHFA_enCA825CA825&source=lnms&tbm=vid&sa=X&ved=2ahUKEwj7o9SFnp_nAhUqmeAKHTeUDcQQ_AUoA3oECA0QBQ&biw=1685&bih=840&dpr=1.1|fun] too…