The incident I saw the remnants of was two kids (sounds a lot like your story!
) drilling out I believe it was a 30-06 cartridge. I don't know if the the heat was enough to ignite the powder or if the bit snapped and sparked or what the ignition source was. In any case, as you said, there was nothing to contain the pressure so it simply flared. No catastrophic injuries, just minor burns on one kid's face and the other one's hand.
I have burned uncontained smokeless powder before and am familiar with the way it burns, so I don't know how they managed to get burned, but they did. My intention was only to say that it CAN happen, albeit usually not in spectacular fashion like black powder.
Like you, when I was a kid I attempted to make my own blow ups with smokeless powder with no luck.