It is probably cause by no neutral wire on the smart switch?

Your heater wire carried higher Ampere compare light.

That cause the wire heat up.

Cut short the wire to reduce it. But it still heat up.

Unless you change the wire to bigger gauge.

It is not much different because the wire is really not that long. Cut it short is to make it more proper and have some space for the hot air out. (not much also)

You won't get risk of fire if

1) the time using is short.
2) The heater KW doesn't exit the max wire ampere carry. Maybe around 20A. or 4.8kw.
3) the connection not loose and tight secure. switch and heater side.

Get a better higher Amp switch.

I know.

That's why I told him, not much different. But trim down the wire in a tight space will have the wire properly done and some air space. A tight space behind the socket will bend the wire 90degree at the screw contact wire side. With the thick wire usually use in the wall, the wire have intend to brick at the end insulation expose wire side.

You know all this consumer wall socket even a 20A socket don't have a cable lug type of terminal. So you only can tightly screw the wire to get a secure contact.

I usually will strip the insulation longer, bend the wire to equal length and insert into the hole. That increase the wire contact amount in the hole. It also help for the smaller wire gauge that the screw have difficult to lock it.

I use a lot of cable lug in industry. If the consumer socket, plug do have, definitely I will advise them to use it.

The actual name is coiling.

Specially extension cord that is wind type. Usually they won't allow over 1000w on this extension cord. Otherwise will heat up in the case.

I usually will pull the whole wire out even in short distance.

Another is the vacuum cleaner. The manual inside will normally advise you to pull the wire out complete and not left some coiling inside.

Twitch the 4 wire together and stuck it inside the hole.