We had a similar battery switch fail, just melted under load.
I was using one of these as the isolator in the generator line, switch was rated at 350 amps, but melted with only 250 amps passing through. No make/break arcing, just couldn't take the current.
I replaced it with a similar one and monitored its temperature and it too quickly heated up. Checked the voltage drop across it and realised that basically these switches are crap, have huge internal resistance and won't handle their rated current without burning out.
I've now replaced it with a forklift 'hit button to stop' switch, which is basically a contactor with a manual action; i.e a spring loaded breaker with big meaty contacts rather than a flimsy wiper switch.
These are designed to break under full load and have minimal internal resistance.
Problem solved.
I bought it from Battery Power systems, and it wasn't much more expensive than the 'Marine' badged battery switch.
Also had to buy an enclosure to mount it in.
BPS do all sorts of useful high current DC kit - good for electric boats!
HTH
All the best.