At the speeds we're familiar with, basketballs and golf balls have elastic collisions. At orbital speeds, satellites are nearly inelastic. So fragment exit velocities lie between the two initial velocities, kv1 + (1-k)v2 for some k that depends on where each fragment came from. If they're colliding, the velocities must be somewhat different, so the weighted average speed has to be lower than orbital speed. So fragments usually don't survive many orbits.

Very well put. It also seems like there's a limit to how bad Kessler syndrome can get. The more debris there is the more collisions, but the more collisions the quicker the debris collides with itself and de-orbits.

That's what I was thinking, Kessler syndrome should be impossible for objects in LEO since all debris orbits decay rapidly (probably 99.9% enter the atmosphere and burn up in minutes, the rest in hours)

I guess if a collision ruptures a pressurised tank, or causes an actual explosion then you could end up with a higher-than-orbit speed?

Possibly. But more likely the thrust from escaping gas will push it in a direction to either slow the orbit down or make it more eccentric and unstable.

Right, if there's something like a small hole in a pressure tank, it's very unlikely to be aligned exactly with the CG, so the tank will spin around and the net thrust will be near zero.

If a pressure tank splits in half, both halves will fly away but that's a very inefficient way of using the energy in the gas, so the added velocity will be a small fraction of the speed of sound in the gas, which is 1/6 of orbital speed for hydrogen, less for any other gas.

You can't really get much of a chemical explosion because the fuel and oxidizer both disperse very quickly in space.