My friend's allowed me to post this now - there's already been threads on this subject, but not the specifics on WHAT causes the effect. Wasted a lot of time trying to replicate it, so I wanted to make a post with specifics that other old threads lacked.

The fire mage Artifact has a hidden effect that causes corpses a mage killed to turn black, give off smoke, and sets them on fire. What wasn't known, and why time was wasted trying to replicate it, is that this effect ONLY OCCURS WHEN IGNITE IS THE KILLING BLOW. Regardless of what spell applies Ignite, it has to be Ignite as a dot ticking down and being the killing hit to get the effect to show up.

My friend and I have set three pets on fire this way in the span of 20 minutes once we figured it out. It's still a rare effect - one pet took a minute, the other took 10. We also did this in an arena (Ring of Trials in Nagrand, a physical location, not one you queue for!), since we'd only seen it randomly happen to other pets in open-world PVP, not duels.
tl;dr

Go to an open-world arena with a fire mage with the artifact Get naked to lower pet's HP if 110Have your pet's killing blow be by the spell IgniteGet lucky and see the body turn black and smolderingRez the pet and voila. This effect stays even if the pet dies.Don't go into a queue Arena or Timewalking and have the pet out/summon the pet, or you'll lose it! These areas strip all mobs of buffs.
*This apparently also works on Lock pets, I just haven't personally co...