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The fire is actually, to some extent, physically feasible:

Let's suppose the upgraded laser sword imparts a massive amount of energy to its target, causing localized superheating (and thus melting) of its components, which then transfer heat to their immediate surroundings, and so on and so forth, until there's no longer enough energy to continue melting the thing. The fire could be explained away as the flammable components of the robot (plastic, for example; they're not made entirely of metal) actually catching fire, rather than simply melting.

Or, just maybe, the game has done away with realism in favor of engaging, enjoyable mechanics.