Yes, the phase current is in direct relation to the torque, which means in plain text more current more torque. The voltage makes the speed, simply expressed.
The parameter "battery current limit" is used to limit the maximum power consumption of the motor e.g. limited to 3kW. (at least I think so
You can imagine the difference between battery and phase current as that:
P = U x I (electrical approach)
P = 2 x Pi x f x M (mechanical approach)
P = Power
U = Voltage
I = Current
Pi = 3.14...
f = speed (rpm)
M = torque
You accelerate your e-scooter from dead stop to maximum speed, with full throttle:
At start you have the max current but a small feedback voltage (I don't know the correct english expression) over the motors coil. You get a high torque, but speed is still low --> battery power is rather low because of the low feedback voltage.
At the end of acceleration you just need to compensate all resistance (air, roll etc.) the used torque lowers, because you don't have an acceleration anymore, but your feedback voltage is, because the high speed, high too --> battery power is rather low because of the low torque.
Now you can imagine, that something between is the maximum power point, when phase current is lowering and voltage is increasing. There you can use the battery current limit, to keep the motor specifications.
The same considerations work with the mechanical approach as you can see: high torque low speed at start, low torque high speed at the end...
Now to the risks:
High current is a higer stress for motors --> more current in the motor coils generates more power dissipation and with that the motor temperature will increase. When the motor windings get too hot the motor damages, due the isolation of the winding wires begin to melt and a short circuit occures.
High voltage for the motor is usually less critical --> but when the voltage gets too high it ist possible that the isolation of the winding is too weak and you get sparks which also damages the isolation of the winiding and so on the motor.
Due the power switching silicon elements with their restrictions of voltage and current, both parameters need to be under control. The thermal capacity of the controller case is rather low to a motor. Due that fact, usually the time where you can overcharge the controller is more limited than the motor itself.
Usually we don't have really good and detailed specs of our motors and controllers, so everybody uses more or less a trial and error, or trial and damage approach