Frankly, I have my doubts as well. Having said that, the IDF Armored Corps doesn't exactly strikes me as a bunch of amateurs; probably there's a very good reason for the existence of this application.
Now, knowing the above mentioned organisation quiet well, I would say it's probably based on previous (bad) experience with improperly stored ammunition. I hate to use cliches, bit it's probably written in blood.
I think we all agree, that judging by the size and shape of the container, it is very likely used for (externally) storing a single 120 mm round. It looks similar (or even identical) to this:
The question is, why would you want to store a malfunctioning round rather than just dumping it on the ground? I'm not sure whether the info I have is correct, however, it makes (some) sense. Me myself don't think it's used for a round AFTER misfire, but rather for a potential dud BEFORE being loaded into the gun-tube's chamber.
Mind you, the 120 mm rounds have semi-combustible cartridge-casings made of, well, paper basically; the only part leaves the back-end of the gun is the metal case-bottom:
You can see it ejected here: https://www.youtube.com/watch?v=eETvj6bIpuA
I'm only familiar with the brass-shell casing of the 105 mm rounds, but my guess is the 120 mm semi-combustible cartridge-casings are much more sensitive to improper storage hence more vulnerable to external damage.
I get not leaving potential IED material for the badguys but if you are in combat, do you really want to unbutton, potentially under fire, to stow the round in that exposed container?
I wouldn't do that, that's for sure; there's probably an SOP for these situations.
you've got 20 pounds (or so) of unprotected high explosives sitting close to your loader and the TC if they are fighting unbuttoned. Assume it would only take some shrapnel or MG fire to detonate that round?
Only if its an HE round, and even in that case, I'm not sure how easy is to actually set it off without proper, intended fuse-action. Experts, feel free to chime in.
The sensitivity to initiation (or the lack thereof) is anther factor: HEAT (High Explosive Anti-Tank) rounds for example have to be relatively insensitive, otherwise they would detonate upon impact instead of after penetrating the armor.
As for the propellant, that's probably a smaller problem than it seems at first glance: firstly, it's designed to be set off by an electric trigger; secondly, it's rather fast-burning than exploding. In other words, more of a fire hazard than explosion; and when it comes to fire in an AFV, the Shrek-principle needs to be applied: better out than in...