Years ago panels were permitted in clothes closets.Have seen it more than once in mobile homes.Would seem if they felt it needed to prohibit this that there were enough fires to warrant it.
I droped out of law school because of the big money in being an electrician
If courts are paying millions over hot coffee ,do you think they would not award it for deliberate tampering with NEC code that would have possibly prevented a death.What reason would they give for allowing this ?