Ok, I guess you mixed up some rules.
I know it is complicated, because the rules are scattered around three different pages.
1. When are embarked models destroyed automatically?
Passengers are only destroyed automatically, if the transport is wrecked AND they can not dissembark.
- BRB p.67 wrote:
- Destroyed – wrecked
The passengers must immediately disembark and then
take a Pinning test. Any models that cannot disembark
are destroyed. After this, the vehicle becomes a wreck.
2. What happens to models embarked in an exploding transport?
- BRB p.67 wrote:
- The unit suffers a number of Strength 4, AP– hits equal
to the number of models embarked, treated just like hits
from shooting. The surviving passengers are placed where
the vehicle used to be and then take a Pinning test.
3. What happens to models around an exploding transport?
All models in 1D6" range suffer a S3 hit as with every kind of exploding vehicle.
- BRB p.61 wrote:
- Flaming debris is scattered D6" from the vehicle,
and models in range suffer a Strength 3, AP– hit.
4. What changes if the exploding transport is open topped?
The hits, embarked models suffer and only these, have a strength one point lower than normal.
- BRB p.70 wrote:
- ...the Strength of hits inflicted on passengers by exploding
open topped transports is one point lower than it
would be in a normal transport (i.e. Strength 3).
So, just to bring everything in order.
First, check if the tranport is wrecked or destroyed.
If it is wrecked embarked models suffer no hit, but are destroyed, if they can't disembark. Surrounding models aren't damaged, because no explosion took place.
If it is destroyed follow the rules for exploding vehicles, that say all models in D6" range suffer a S3, AP- hit. Then embarked models suffer a S4, AP- hit (S3 if the transport was open topped) and are placed where the vehicle used to be and take a pinning test.
I must rule with eye and claw — as the hawk among lesser birds.