In addressing the global climate crisis, the energy storage performance of Li‐ion batteries (LIBs) under extreme conditions, particularly for high‐energy‐density Li‐rich layered oxide (LRLO) cathode, is of the essence. Despite numerous researches into the mechanisms and optimization of LRLO cathodes under ideal moderate environment, there is a dearth of case studies on their practical/harsh working environments (e.g., pouch‐type full‐cell, high‐temperature storage), which is a critical aspect for the safety and commercial application. In this study, using pouch‐type full‐cells as prototype investigation target, the study finds the cell assembled with LRLO cathode present severer voltage decay than typical NCM layered cathode after high‐temperature storage. Further decoupling elucidates the primary failure mechanism is the over‐activation of lattice oxidized oxygen (aggravate by high‐temperature storage) and subsequent escape of oxidized oxygen species (On−), which disrupts transition metal (TM) coordination and exacerbates electrolyte decomposition, leading to severe TM dissolution, interfacial film reconstruction, and harmful shuttle effects. These chain behaviors upon high‐temperature storage significantly influence the stability of both electrodes, causing substantial voltage decay and lithium loss, which accelerates full‐cell failure. Although the anionic redox reaction can bring additional energy, but the escape of metastable On− species would introduce new concerns in practical cell working conditions.