Shouldn't put water on oil fires for similar reasons.

I guess it gets split? Oxygen fuels the fire and hydrogen explodes? Or is the plastic going off like c4?

Never feed a volcano god water... I'd probably react the same way. I believe a strong cocktail in a fancy mug is traditional.

Steam explosion. The lava is so much hotter than the boiling point of water that it converts from liquid to vapor very rapidly, that rapid expansion is the explosion. With an oil fire, it's much worse because the oil fire typically only burn on the surface where it is in contact with air. Adding water and a steam explosion throws the oil into the air allowing all the oil made air born to also catch fire and burn.

Curious that it splutters for a good while. I expected the water to boil more or less instantly and all get released at once.

It could be related somewhat to the Leidenfrost effect. the pockets of water quickly becoming surrounded by an insulating layer of water vapour, slowing the boiling process.

*related=https://videosift.com/video/What-Happens-When-A-Box-Of-Garbage-Falls-Into-A-Volcano-Lake

What Happens When A Box Of Garbage Falls Into A Volcano Lake has been added as a related post - related requested by Eklek.