3/w appliance should never have been allowed. I don't know why it took so long to correct the problem. Couldn't have a bare grd/neutral on 120v. Why was it ik on a 220v allliance circuit???
Because it was only allowed where the wiring method already had a bare neutral, in the case of SE cable. If NM was used, the neutral still had to be insulated.
Your concern is obviously with using the neutral for bonding, and not whether it's insulated. In my years of experience, I have had one direct issue with that.
A customer received a bad shock between their range and the sink. I discovered that the neutral conductor of the cordset pulled out of its crimp-on lug.
We found that the cord ran through a hole in the floor, and only a few strands of each conductor of the original range cable were wrapped around each plug blade.
The previous owner had apparently rearranged the kitchen, moving the stove a few feet farther from the panel. The wire pulled out of the lug due to the cord's weight.
I wouldn't say the 3-conductor installation caused the hazard. The same thing could have happened with four conductors with such a poor and dangerous re-installation.