Rather than calling this 'Fire' it may be worth defining it as 'Progressive Damage' - i.e. something is going on, be it fire, slow decompression, spreading radiation, secondary explosions, whatever, that is causing damage over a period of time following the initial attack.
I can buy this more easily than the frankly silly peice of CGI concerning the Churchill - fires burning in compartments open to space, flames licking upward - in part of the ship which is zero-gee!
I still think it's unecessary, though - GDW's old Harpoon modern naval game had something similar - which was at least based on real-world events - and it slowed down and complicated the game a treat.
ACtA is a simple, broadbrush game (this is in no way a criticism) - Churchill being crippled and skeleton crewed represents her state in her final moments on screen quite well enough. If you, as a gamer, wish to imagine her as on fire, or flooding and down by the head or about to be eaten by the giant space goat for that matter, that's upto your own imagination.
Which is a thoroughly good thing.
