Another one and done.....

 

While I've seen a few melted batteries in my time. I've even killed one with loose terminals. While the terminals were melted some the battery open up internally at one of the terminals. This melting is definitely way above what I've seen. There could be a short somewhere. I'd still make sure that cables are not pinched. From the looks of it, I'd replace the cables also.

At one time I replaced a 1.5 kw starter starter with a 2.0 kw. First time I hit the starter button. Nothing and the battery terminals got real hot. Connections to the battery was good. New cables. 2 gauge wire. I found that the speed sensor was touching the bottom lug on the solenoid wire to the starter motor. Would have been fine but the speed sensor was an aftermarket made out of aluminum. Dead short to ground. Replaced with stock HD (cast plastic) and all was good.