Sounds like another case of homeowner or "handiman" saying "here's a wire let use this one" for the feed to the shed. Then using the old fuse mentality of the fuse keeps blowing just put in a bigger one. Then you get a breaker that is not functioning properly making the scenario of putting the penny under the fuse.
How was it you got there before the house burned down? They were lucky.
I've been on a rewire call, HO said about a particular outlet "that outlet not working but no breaker tripped". Investigated as I was replacing and when I pulled the receptacles out, the back half with the stab ins stayed inside the box the face didn't show any real signs of heating but the bakelite was so brittle that I could powder it in my hand. Whole circuit was being rewired anyway but it was so close to being a fire.
Brings up a thought, would these types of incidences be less if receptacle is pig tailed rather than being feed thru, where it is the overload of the entire circuit rather than of the individual receptacle that is heating up a receptacle?
The picture in the OP looks like the strap had gotten energized without tripping the breaker to get that burn pattern not directly a backstab issue.