Grounding Cable From Motor to Encoder Turned into a Lamp Filament

EDIT: Just checked continuity, the screw appears to be too long and contacts the windings. Questions about damage remain, but I will check soon. I guess I will leave this up as a warning to others. For the odrive d5065 motor be careful, the clearance is not the same for all mounting screw holes. The cables coming into the motor reduce the clearance on that side significantly. Do you guys ground your encoders to the motor casing?

The Incident:
I was trying a parallel connection with power supply and battery. I hooked everything up and set it so the power supply was supplying about 50-60 mA while the odrive was connected to the computer. Then I tried to do a full calibration and I heard the beep. All of a sudden I see the grounding wire get so hot it was literally glowing like a lamp filament. I rip out all the power supply connections and survey for damage. Strangely enough, the cable that was glowing did not seem to have any damaged copper, only the sleeve was burned in a few places and it slid off easily. The copper was intact. No other damage was observed on the rest of the cable or on the odrive.

My setup:
I am using the nema enclosure that I 3d printed. As well as a AMT113 encoder. The cable for this encoder comes with a ground wire that it recommends to connect to the motor body. I accomplished this by attaching a 28-30 awg wire to one of the 4 screws that attach the motor to the nema front plate.

Possible Causes:
I am wondering if the screw was too long and it maybe contacted the winding inside the motor. Then once the motor was energized, the battery pumped a bunch of current through the grounding wire. Does that sound reasonable? Would that cause damage to anywhere?

The only other idea I have is that it was somehow a result of motor shaft currents. However I do not understand how that could happen without the motor spinning. Can this happen like this, how do I prevent if so, and would this have caused any damage to encoder or odrive?

Additional Questions:
Can anyone tell me if I should expect damage to the odrive if up to 10 amps (or more) was pumped into the ground connection for the encoder? Could it have blown the stm32 chip? Finally, was my grounding wire too small, and maybe this was normal? I have since replaced this with solder wick for as a high current conductor. I will be testing the board soon, but I want to analyze what happened so I can make sure it does not happen again.

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I don’t ground my encoders as such (apart from the ground and screen in their cable), but I do ground my motor casings when they are not mounted to a grounded chassis.