Can the grounded conductor of a cable assembly be reidentified as a grounded conductor?
As said above reidentifying a grounded (neutral- white) conductor into an ungrounded conductor is perfectly legal per the NEC-
If you can get to a code book, (or maybe someone will post the passage in its entirety) its listed under 200.7(C)(1) in the 2014.
So did you come across a water heater cable that had the white conductor taped? Perfectly compliant.