Sounds like to me an inline fuse should have blown on you. I have a large FUSE BLOCK near the battery to protect wiring from burning up... Mine has a 130AMP ANL Fuse in it...
The Batteries can put out alot of DC Current if the cables get shorted to frame ground down the line. Smoking battery cables sure is the sign of a dead short to frame ground for sure...
My current battery install looks something like this
I am planning replacing my old 2008 batteries for two groups of two each GC2 6V batteries in my bank. My basic layout will look something like this when done..
Just curious if you have such a in-line fuse in your setup...
Roy Ken