I wouldn't be surprised if injuries are used as punishment. Just look at the "taser-incident".
However, fire actually
is very useful during certain treatments. For example, if someone is bleeding badly, you can melt a sugar coating on it to stop the wound from bleeding further. Also, the sugar has an antibacterial effect. In a primitive hospital like they have at
the Colony (or the rest of the world in We're Alive, for that matter), I could imagine such treatments being used.
There are many more treatments requiring fire or extreme heat that you wouldn't think of first, but are actually very practical if you give it some thought.
So basically, while I think your theory is pretty likely to be true, there is a chance she was telling the truth.
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