So is this a closed system, by which both the hydrogen and the oxygen would be captured and used to fuel an internal combustion engine?
No, the oxygen atoms bind with the iron on discharge, and move back to the nickel hydroxide on charging. In a nickel iron battery, or nickel cadmium, or a NiMH cell, the oxygen atom moving between electrodes is how the charge is chemically stored and used. That is why all three cell types have the same operating voltage of 1.2 volts. Of course I’m taking this fuzzy info from memory of redox reactions, and from vague recollection of half cell potentials of various elements.
“So is this a closed system, by which both the hydrogen and the oxygen would be captured and used to fuel an internal combustion engine?”
In a ‘perfect’ closed system you would generate Brown’s Gas and then immediately recombine the O and the 2 H’s in an internal combustion engine. Energy out is thus higher than energy in...