Lithium batteries do indeed need to be monitored, preferably by an integrated BMS (battery monitoring system).
To be precise, that wire from the EarthX battery does not send numerical temperature data.. The wire coming from the battery is a way for the BMS circuit board that is part of the battery assembly to indicate that one of several problems may exist. The flashing of the LED refers to the LED on the battery. I think (but I'm not certain) it also refers to a remote LED that builders can install on their panel. If the fault alert wire is instead connected to the EMS 220/221 per the diagram, how a fault alert is presented via SkyView beyond just a simple 'battery warning' is not clear to me yet. From the EarthX manual: