This is called objectionable current. It creates a parallel path for current to return to the source. Mike Holt has a video on this.
Three pronged dryer receptacle which was allowed until NEC 1996 bonded the chassis to neutral and did not have a EGC to panel.
Broken neutral is more common before the meter where it is exposed to the elements. When the neutral is lost, your washer has path to ground and the center tap neutral (depending on where the break is) through the EGC and possibly the water supply if it is connected with stainless braid wrapped hose and attaches to grounded water line. So you end up building 120v between dryer and washer cabinets. It was phased out because of this danger. The risk is much higher with a metal frame tool because the cord is handled much more frequently. Loose neutral in a power strip means the chassis becomes hot only when the tool is activated.
If it is moved to an older house and the chassis is not connected to neutral, you'll have a floating frame. If moved to a newer house and the frame is bonded, you inadvertently create a neutral to ground bonding at the dryer.
Last edited by Electric-Light; 03-18-17 at 07:58 PM.
If another grounded object should contact whatever is connected to this bootlegged EGC, you have parallel path(s) for neutral current to flow over objects not intended to carry current.
"stray voltage" problems are almost always a result of unintended current paths of the grounded conductor.
This sort of bootleg may go without any noticeable problem for years in some cases. If in a wood framed building with no other grounded objects in the vicinity you can have full 120 volts on the frame of an appliance and never have a nearby ground reference to cause you to notice it. Of course if you have full 120 and bootlegged EGC, you probably have completely open neutral and the appliance doesn't operate, but my point here is there is no shock hazard in that situation because there is no grounded object within reach.
The compressor had a fault in it. I pulled the 3 prong receptacle, only to find 2 wires connected. So the compressor frame sat at 120V to ground until it tried to find another path to the source, through me. That event was 20+ years ago, it was what got me interested in electrical; I didnt want that to happen again. The same day I learned about GFCI receptacles and installed one, and got a new compressor.
Electricians do it until it Hertz!
Had an inspector tell me once, he would rather see the jumper from neutral to EG terminal at a device vs nothing. I didn't ask him why the heck do I spend so much time in Code classes if that is your thoughts. Carpenters that had done the remodel replaced old 2 wire with new devices and jumpered all of them.