Some explanation for the "fart effect":
This is actually a different effect. When the cavity expands, some of the oil in the ballistics gel gets aerosol. The cavity then compresses the air/oil mixture. This increases temperature until a critical point is reached and ignition occurs.
Indeed that would be a better explanation for the smoke. I assume the air in the mix comes in through the entry point before it closes?
Bubbles collapsing and igniting their contents is super cool. There are some folks looking into using it to trigger nuclear fusion. See: Sonoluminescence, Bubble fusion.
The original video: ".44 Magnum vs. Gel Block"
...and an explanation of the explosion:
To paraphrase one of the commenters:
The biggest advantage ballistic gelatin has for testing firearms is that it produces consistent, repeatable results. And sometimes, a yellow flash followed by a smoke fart.