Testing batteries by measuring their short circuit current, why it doesn't work?
It's generally a bad idea, especially if you don't know with 100% certainty a lower bound on the internal resistance of the battery. As a secondary concern it may damage the battery. 

That said, I do this myself briefly with alkaline batteries because I know that the cell or battery can produce only a few amperes into the 10A multimeter input. I would not do it with any other kind of battery, including NiMH.

Some battery types can produce much larger currents- enough to damage themselves (heat up, vent electrolyte, explode, even), melt the test leads causing severe burns etc. 

The proper way would be to apply a reasonable load (reasonable depends on the battery chemistry, size, design etc) and measure the voltage. NiMH is a bit thorny since it's difficult to determine the charge condition from the terminal voltage. It's better to discharge with a moderate load to a known discharge condition (perhaps 1V per cell or a bit less) then charge from there. Overcharging NiMH batteries causes irreversible cumulative damage.

Once the battery has charged properly you can discharge it into a reasonable load and measure how long it lasts (taking care not to discharge it too much, which can also cause permanent damage).