This is an example of thermal insult and runaway on a loose or poorly terminated connection at the main power switch
Here is a loose terminal on a contactor:
and one showing thermal insult on the contactor:
If a terminal is loose and/or corroded it becomes a high resistance connection and that generates heat. The hotter the terminal gets, the weaker it becomes, and this continues until it reveals itself as a critical failure.
Additionally, every switch, relay, contactor, etc... is prone to similar phenomena, especially if the current rating of the switch is met or exceeded. The switches can arc and the points can suffer spawling and other damage which lessens the contact area. The rocker switch is designed to actuate quickly, minimizing any arcing and ensuring positive contact so they are ideal for this application. Here is more about rocker switches: