While buildings are being upgraded, if they have lanterns hanging from the celling, the lanterns will fall when the block above them is replaced, and unlike before the lanterns now fall and brake on the ground, causing fire. This did not happen in 0.2.35, however it is happening in the latest version of 0.2.45

Looks like this may not be getting fixed, being that the pack has been updated to 1.18.2 now. Does anybody know what is causing lanterns to catch fire win falling, and is it something that can be disabled in the config?

I had the same issue, the problem lies with the Supplementaries Mod (which enables falling lanterns). Just disable falling lanterns in the Supplementaries config files (or set it to NO_FIRE), this should fix it.