Hi curtis0707, welcome to the forum.
If the water heater is working ok now, then it may have just been some past event by a previous owner but I would check carefully to make sure there are no current gas leaks or loose connections that could cause another event. Quite possibly there may have been something like a spider nest blocking the burner and causing it to flame back. If it is just a melted knob and it turns ok you may be allright.
Gene & DW Ginny
2002 Sunline T-2363
2008 Toyota 4-runner 4wd 4.7L V-8
Reese Dual Cam straightline - P3 Brake controller