You installed an aftermarket battery without the required spacers.
Each start/cranking is a high demand instance..draws many amps.
Aftermarket battery has posts a little further back from case side.
Your power sports battery should have come with some brass color looking spacers.
Spacers would have a sitting flat side on circumference of circle.
The spacers are sometimes stuck on red plastic post protector or in a little bag within box.
Many people overlook the spacers.
The spacers would be a little less than 0.25 inches thick and would fit between battery post and cable.
That picture makes it evident that cable was installed at an angle and then tightened.
That incorrect installation allowed cable to vibrate loose and arc due to diminished contact.
Ideally you should just get a replacement battery and remount with spacers.
You could get creative and re-use battery but internal condition is unknown and might risk an internal short...a lot of heat was created outside with that observed damage but you can not see inside.

 

Theres no spacer so you've got a bound treminal and no surface area. This battery requires a solid spacer to clear the step in the battery, and bolt the terminals flush without getting in a bind.

 

The original poster asked his question and never returned to see if anyone answered, 2-1/2 years ago.

A classic one and done.

Welcome to the forum.

 

I'm useless at navigating forums, sorry if I missed any replies. I'm all good here.