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The output voltage can not be less than the input voltage. If Vout is less then Vin there is no current limit function. If the battery is bad, and If the wires are shorted there may be no current limit.
Q1 & R2: Normally I add a base resistor. Maybe 100 ohms. Under a sudden short condition the Base current gets too high and blows out Q1.
I do not know what the data sheet said "Error Amplifier Clamp Voltage". Is at safe to have the "Fb" voltage above 2 volts? (with out a current limiting resistor) In spice there is not a problem but I think in real life this will happen. I am not certain if this is a problem.
you don't want the voltage on Fb to be more than 2V. the Fb pin is for setting the output voltage, not for controlling the switcher's operation. if you are trying to use Q1 to signal a current limit, you're going about it the wrong way, current limit circuits appear on page 11 of the data sheet. you also did not mention what type of battery you are trying to charge. different batteries have different requirements for controlling the charging current and charging voltage. if you use this charging circuit with a lithium battery, you could set the battery on fire from overcharging.
it looks like you need to read the data sheet carefully.