"There was initially an arc event when the electrician wired up the electric tankless water heater (wires in junction box not shielded enough)"

I hope the electrician who's working on your wiring now is NOT the one who messed up that work.

It's not unusual for breakers to hum under load.

I had a main panel that water got into and caused corrosion to the buss and breakers. I found that after fixing water problem and replacing all of the breakers I still had a problem circuit. If I turned off the lights and watched the breakers I could see little arcs shining through at the point of contact. A thorough cleaning of the buss with wire brush and small file solved it and it looked much worse than yours.

The word is "bus" by the way. Putting your lips to electrical things is fraught with peril.

The original story makes little sense. Power wires aren't shielded and breakers are designed to trip with excessive current.

The sanding most likely removed some of the plating from the bus bar. If a new breaker was immediately placed back in there, there isn't likely to be a problem. Left exposed, it might oxidize a bit, but even then it's not likely to be a problem and it would manifest itself with excess heat not "humming.."

As pointed out, humming isn't too uncommon.

I should clarify - the arcing event occurred in the junction box where the water heater wiring is connected to the wires from the panel. That connection was not shielded enough - it sparked violently when they first powered it up.

It still makes no sense. "Shielded" is not the term you are looking for. It sound like uninsulated wiring touched the box, but that's pretty seriously stupid on the part of the installer.

"sound like uninsulated wiring touched the box"

That's how I interpreted it too.

"pretty seriously stupid on the part of the installer."

Yes. It's hard to imagine how that could happen with a supposed pro. I reread the original post and see that Travis called a different electrician this time, which seems like a sensible move.

But a short circuit "burned the breaker" and the bus? That doesn't sound right at all. The breaker should trip immediately. It might be more plausible if that were an old Zinsco panel, or maybe a Stab-Lok.

It's neither. It's appears to be a fairly recent HOM panel with the "plug on" neutral bar.

Update: Had another electrician take a look - wires are 8 but should be 6. Fail.

That still shouldn't have damaged the panel.

I'm with Ron. Something smells funny about this situation.