An oil-filled transformer is a large sealed vessel of combustible liquid with a high-energy electrical apparatus immersed in it. Under normal conditions this is extremely stable, because the oil is both the insulating medium and the cooling medium and it is not exposed to air. The hazard is entirely about what happens when an internal fault occurs and that containment is lost.
An internal arcing fault vaporizes and decomposes the oil around it, generating gas at a rate that raises internal pressure faster than any relief device can vent. The result is tank rupture and the essentially instantaneous release of the oil inventory, much of it already heated and aerosolized, into the vault. This is not a fire that develops from a small origin. It arrives at full scale in the first second, and a large transformer can hold anywhere from several hundred to several thousand gallons.
That character determines the protection philosophy. Suppression discharged into an event of that magnitude has limited effect on the initial release, which is why NFPA 850 and NFPA 70 emphasize passive protection: fire-rated vault construction that contains the event, oil containment sized to the full transformer inventory, pressure relief venting to a safe location, separation distances for outdoor and pad-mounted units, and increasingly the substitution of less-flammable insulating fluids to reduce the hazard at its source.