He held and threw the bottle incorrectly. You can see when he's running up, the bottle neck is held horizontally in parallel to the ground, allowing liquid to flow to the lip and out. The rag catches it while he's running, but when he throws he tips it back and upside down, so the liquid flows out down his back, catching fire as it passes the flaming rag.
Ideally a properly assembled molotov would have a cap with a hole in it for the rag. That reduces this problem, but doesn't fully solve it. Field-expedient molotovs just have the rags stuffed down an open bottle and carried carefully.
Either way, when you're actually throwing one, always be careful to keep it upright. Be mindful of any tipping as you cock your arm back to throw, like this guy obviously didn't. If you watch successful throwers, you'll sometimes see a bit of a sideways throw, instead of a straight back baseball pitch like this guy died. That's safer and keeps the bottle more upright, but if you aren't practiced it can weakens the throw strength and distance.
(This is not advice or a manual. Just observational information, in case anyone wants to do proper physics in a video game or something.)
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molotov hot town in the city.mp4