None of the exploding chests did any damage that was noticeable, even when standing still closeby.
I would expect at least some noticeable damage, even if heavily armored(magic or plate).
Also, as an improvement, the avatar might walk towards the chest, as otherwise it is possible to stay away far enough with the entire party.
Severity: low. It didn't not stop me from completing the game, but it was too easy, allowing sloppy play ;-)