He probably means that, on a given line of his list, those items are compatible with each other. However, items on one line are not (necessarily) compatible with any on another line.

As to why you got smoke with the switch off, that's extremely unusual. It takes a multiple-element failure for that to happen. The probability isn't zero, but it's small. This might be a good time to play the lottery.

It's hard to say for certain what happened without examining the debris, but it could be that the switch failed in a high-resistance state, so that "off" was actually "high resistance." That could've heated up the switch to the point where it cooked itself, and its environs.