Burned Wires in the Panel
The burned wires in this electrical panel aren't the result of a defect in the panel, the breakers or even the wiring. I damaged the wiring by the simple act of removing a screw (and, no, I'm not responsible - that cover should be safe to remove. The listing agent and I had this discussion and the electrician backed me up.) Sparks flew everywhere as the screw came out and the panel sizzled in front of me. Fortunately, I wasn't hanging onto the panel cover or it would likely have knocked me across the room. Hidden defects exist in nearly every home. While the home inspector tries to find as many of them as possible, the term 'hidden defect' persists for a reason. None of us have x-ray vision so items stashed in the walls stays stashed. Even my infrared camera isn't going to help with many of these issues.
The defect in this case was the original installation of the wiring. By code, those wires should never be placed in a position where this could possibly happen. When I see wiring too close to attachment points, it gets written up for correction.
And, when I'm taking the panel cover off, my clients aren't allowed to help. The flash range on a 200 AMP panel is about three feet (so I've been told - I have no desire to test that particular factoid!) I appreciate the offer but even the slight risk that something like this can happen - this is the first time in eight years for me - isn't worth it.
I joke when I see burned wires in the panel that someone had a bad day. You pay us to do this as safely as possible and we are, most of us, very careful but the rare nasty surprise can still be waiting. If it has to happen - let it happen to the inspector.