I'm pretty sure doing "instant upgrade" on toilets automatically adds the composting upgrade, which will eventually cause your toilet to burst into flames if you don't realize it was installed. Not sure if this is a feature or a bug but I noticed it a couple patches ago. I manually added each upgrade I wanted when I figured out what was happening.
@mosteele1212 What everyone else has said.
If you have the composting container on your toilet and don't remove the compost, it catches on fire. However, the option to remove the compost only appears if you have an insect farm on your lot.
In order to make your toilet stop bursting into flames (assuming that yes, you have the composting container) you need to either buy an insect farm and regularly empty the container and put what you remove in the insect house, or delete the toilet and buy a new one (individually adding whatever upgrades you actually want).
I hope that helps!
