[semi-extrinsic]

On the flipside, water is used for the periodic pressure testing of scuba tanks, precisely because it is essentially incompressible. So if a tank does blow up during testing, you have a very small expansion and thus very small energy release.

If you draw a curve of gauge pressure as a function of volume, the energy release is the area under the curve, and as the curve steepness goes to infinity (i.e. compressibility goes to zero) the energy released starting at a given pressure goes to zero.

[A_Person]

I did know that, but I'm not sure how that applies. In your scenario, the tank ruptures, there's virtually no water expansion, so nothing happens. In my scenario, the tank ruptures, the internal gas content instantly expands by (say) 250 times, creating a massive force which I assume is transmitted virtually undiminished, through the water, to the sides of the container, which promptly explode outwards. I do accept that some of the force will go upwards, but I believe the container will still explode. Not really trying to disagree, just trying to get my head around it :-)

[semi-extrinsic]

I'd have to do the math (and know the material properties and thickness of the tank walls) before saying one way or the other, whether that scheme is effective.

What it could also be doing, is keep the tank from going off like a missile through the building (added inertia of the water plus it takes much longer for the tank to tip sideways).