That's an easy one, you overheated the pad. Shortly after that it would come completely apart.
How long did you use it?
How much of the vehicle did you do?
With a cutting compound you build heat MUCH MORE QUICKLY, AND MUCH MORE HEAT than you do when polishing.
You should have AT LEAST 4, preferably 6 pads to compound with. The hood alone would take 2 pads. Front fenders and half the door, 1 pad. Rest of the door and front of the quarter panel, another pad. Roof, (depending on size) 2 pads. That leaves 1 for the trunk. And of course do the bumpers last and rocker panels (
as they are the dirtiest) and you might be able to do both with a single pad. Now of course that adds up to 10 pads, and you don't need THAT many.
The trick is to rotate your pads into and out of duty while doing similar sized areas as I mentioned. First in, first out. It'll not hurt a pad to sit there, cooling off Velcro side up on a grate (or on a plastic Coke crate) while you are working with another one, and another one, and another one. Do it like that and you can use as few as 4 pads, just make sure the first one has cooled before you put it back into service.
How hot is too hot?
Pull the pad from the machine, feel the BACK of it with the back of your hand, or better yet put the back of it against your cheek. If it's anything more than warm, DO NOT USE IT ANYMORE. (Till it's cooled off.)
Heat of course builds up on the surface, but it also builds up between the Velcro side and the backing plate from nothing more than friction. It can escape the face much easier, but the back doesn't vent, therefore the heat has nowhere to go. This was so bad in the early days of the Meguiar's microfiber pads that the pads were failing. The engineers went to school on it and found out that the Velcro side of the pad was a significant part of that heat problem. So they came out with their own backing plate to be used with THEIR pad(s) and after that you hardly ever hear about premature pad failure (like those early days).