Ah, I found the passage. It wasn’t Josephus - it was an incident in the Third Jewish Roman War, about 40 years after his death. Later Jewish tradition records the incident as:

Said Samuel: It was at the end of the period of persecution. and they [some fugitives] were hiding in a cave. They proclaimed, “He who would enter, let him enter, but he who would go out, let him not go out.” Now, the sandal of one of them became reversed, so that they thought that one of them had gone out and been seen by the enemies, who would now fall upon them. Thereupon they pressed against each other, and they killed of each other more than their enemies slew of them. R. Ila`i b. Eleaza said: They were stationed in a cave when they heard a sound [proceeding] from above the cave. Thinking that the enemy was coming upon them, they pressed against each other and slew amongst themselves more than the enemy had slain of them. Rami b. Ezekiel said: They were stationed in a Synagogue, when they heard a sound from behind the synagogue. Thinking that the enemy was coming upon them, they pressed against each other and slew amongst themselves more than the enemy had slain of them. In that hour it was enacted: A man must not go out with a nail-studded sandal.