As I understand it, lithium batteries are not permitted to be carried aboard if there is any possibility of the contacts being shorted out in transit (this can lead to excessive current draw, heat, and possibly fire or even explosion). If the battery is inside your laptop, it is considered protected against accidental short. If a battery is carried outside its device, then it must be housed in a suitable protective container, whether it is carried in hand luggage or checked luggage.

It appears that some airlines do not permit lithium batteries in checked luggage at all. For example, from Air New Zealand Firearms, Prohibited & Restricted Items:

Spare Lithium Ion Batteries with a Watt-hour rating exceeding 100 Wh but not exceeding 160 Wh for consumer electronic devices. Maximum of two spare batteries may be carried in carry-on baggage only. These batteries must be individually protected to prevent short circuits.

Also, for smaller batteries:

All Spare batteries, including lithium metal or lithium ion cells or batteries, for such portable electronic devices may be carried in carry-on baggage only. These batteries must be individually protected to prevent short circuits by placement in the original retail packaging or by otherwise insulating terminals (e.g. by taping over exposed terminals or placing each battery in a seperate plastic bag or protective pouch). In addition, each installed or spare battery must not exceed the following quantities:

• for lithium metal or lithium alloy batteries, a lithium content of not more than 2 g; or
• for lithium ion batteries, a watt-hour rating of not more than 100 Wh.

If you are that concerned about losing data on your laptop, then you should probably investigate an online backup service. My own laptop, for example, is both encrypted and 100% of my data is backed up, so loss of my laptop is a non-event as far as information security or loss is concerned. I would just get a new laptop (hopefully covered by my insurance!), and restore all my data.

Lithium batteries are a safety hazard as a thermal runaway can and has lead to fires. They are permitted in carry-on because if a fire starts, it can be fought and extinguished, as in this incident near Sydney. the Australian Transport Safety Bureau remarked in their investigation:

In the meantime, the ATSB stressed, "this event reinforces the importance of the prohibition of carriage of lithium batteries in checked baggage and the benefits of being able to respond quickly and effectively in the rare event that a problem is encountered in the aircraft cabin."

Although rare, whenever a thermal runaway from lithium batteries has occurred in the cargo hold, everyone on board was killed.

Due to safety concerns, IATA issues guidelines concerning the transport of lithium batteries, which airlines will likely enforce. (In a worst case scenario, a lithium battery could spontaneously explode and cause a fire in the cargo hold, which is inaccessible to humans during the flight.)

The Lithium Battery Guidance Document for 2015 states (emphasis added):

Passenger Provisions [p. 12]

Transport within Passenger Baggage

… certain replacement batteries which are not OEM or aftermarket batteries but simply low-cost copies of those – also called “fakes” – may not have undergone the required tests. Untested batteries are consequently excluded from air transport.

[…]

2.3.5.9 Portable Electronic Devices (including medical devices) containing Batteries

2.3.5.9.1 Portable electronic devices (including medical devices) (such as watches, calculating machines, cameras, cellular phones, lap-top computers, camcorders, etc.) containing batteries when carried by passengers or crew for personal use, which should be carried in carry-on baggage. Spare batteries must be individually protected to prevent short circuits by placement in the original retail packaging or by otherwise insulating terminals, e.g. by taping over exposed terminals or placing each battery in a separate plastic bag or protective pouch, and carried in carry-on baggage only. In addition, lithium batteries are subject to the following conditions:

(a) each installed or spare battery must not exceed:
  1. for lithium metal or lithium alloy batteries, a lithium content of not more than 2 g; or
  2. for lithium ion batteries, a watt-hour rating of not more than 100 Wh.
[…]

2.3.3.2 Lithium ion batteries exceeding a watt-hour rating of 100 Wh but not exceeding 160 Wh may be carried as spare batteries in carry-on baggage, or in equipment in either checked or carry-on baggage. Batteries must be of a type that meets the requirements of the UN Manual of Tests and Criteria, Part III, subsection 38.3. No more than two individually protected spare batteries per person may be carried.

Although the text provided above does not impose a limit on the number of lithium metal and lithium ion batteries that fall under the 2 g or 100 Wh limitation (See 2.3.5.9) being carried as spares within a passenger’s carry-on baggage it must be emphasized that the number of spares must be “reasonable” in the context of the equipment used by the passenger and his or her itinerary. Furthermore, these must be intended to power portable electronic devices (including, but not limited to, cameras and professional film equipment, laptop computers, MP3 players, cell phones, Personal Digital Assistants (PDA’s), pocket calculators etc).

Batteries which are carried for the purpose of resale or beyond personal needs are clearly not covered.

The built-in battery on a 2019 16-inch MacBook Pro has a 100 Watt-hour capacity, presumably because of IATA's limit.

In summary, the number of battery-powered laptops you can take on a plane would be limited by what you can fit in your carry-on, and it has to be reasonable and for personal use. Check your airline's policies, which may differ from the guidelines above.

Just as a note for future travels, as far as I remember beside of the problem with the battery in the luggage you might face a second problem:
Electronic devices in your carry on must be able to be turned on for inspection. They will not ask for this every time, but it can happen, and happened to me already several times. You will have a hard time turning the laptop on without battery and charger/power-supply. Beside that if you can not turn the laptop on and transport the battery separate you might be cause for even more suspicious, maybe missing a flight or connection or having to leave the laptop behind.
Best for travelling for us with many children has been, backpacks and carry-ons with wheels that can be operated single handed. For check-in put them in the hand of a child each, otherwise an adult can drive/carry 3 to 5 of them with ease!

There is one additional reason your approach may not only lead to your battery being confiscated, but now your laptop being confiscated. As specified in this article, all electronic devices carried in carry-on luggage must be fully charged and functional. If it does not turn on, it may be confiscated prior to boarding. There are now concerns that terrorists are trying to smuggle explosives on board that cannot be detected by current processes in place.

I've researched the regulations since then, and it seems that some airlines/airports do not allow you to pack "spare" lithium batteries in your checked in luggage. This leaves us wondering what exactly the definition of "spare" is, as this was not really a spare battery; we just separated it from the laptop temporarily for traveling.

A "spare" battery is one that is not fitted in a device. So, for example, I have two batteries for my camera: if one is fitted in the camera, the other one is a "spare battery"; if, for some reason, neither was in the camera, both would be "spares".

As the other answers have pointed out, the reason is fire safety, with a side-order of the new regulations about proving that electronic devices actually work.

From personal experience, yes. I once received a replacement battery as I was leaving on a trip. I replaced the battery, but the old one was stuck with me for the remainder of the trip. It was just in my backpack, in a box, and it passed though without comment on the way there, and on the way back.

It seems that quite recently explosives have been developed that cannot be distinguished from a battery on an X-ray. On the other hand, they are easily distinguished from a battery by the fact that your laptop doesn't work with one of these inside your laptop instead of a battery. That's why you will find that you can be asked to prove that your laptop is working.

On the other hand, something looking like a laptop battery could easily be hiding explosives, so I'm not surprised it got confiscated. Two months or maybe even a month ago you would have been fine. I'd strongly recommend to carry a laptop in your hand luggage with a charged battery inside.