From the pictures, the heat damage and darkened fuse ends definitely look like a poor connection, possibly in the switch itself. (Are they turned off/on often ? )
As pointed out by the back and forth discussion, the situation is such that if the actual current draw per phase is nameplate (24.6) then the 1.25% requirement takes you just over the 30 amp limit.
I think we are caught been the fact that the install has been working for 20 years and the fact that it actually not Code (by a half amp or so).
No doubt a #8 wire, 60 amp disconnects and 35 amp fuses would be the best route to assure a Code compliant and trouble-free install. Often that is a "hard sell" after 20 years of operation.