True, as long as the O2 is in the bottle and the spark is outside. Mike, with O2, anything is fuel. I remember vividly about how the Apollo fire operated and read all the published reports on the incident due to a great interest in space technology at the time.
That said, the reported incidents, including the fire that took the lives of three astronauts, were all in conditions where the spark occurred in a pure O2 environment. My take is that there'd have to be a really significant O2 leak for a free spark to touch off a fire; merely sparking the bottle wouldn't do it. A small leak would diffuse rapidly in the tail cone and, being rather the opposite of air tight, rapidly from there into the atmosphere. Also, where else would you put it? There are wires throughout the airframe, especially areas that would hold an O2 system, that are perfectly capable of providing sparks. In fact, I kind of feel that wires are more notorious for spark generation than batteries. Really, it seems to me the best thing to do is make the system as leak-proof as possible. To that end, I am not really a fan of that (is it copper?) tubing to the header; I'd rather see something flexible. But other than that, the installation doesn't look too worrisome to me. Take that for what it's worth; I'm only a builder. Any A&Ps and/or DARs want to chime in?