For whatever reasons (corrosion, overtightening, poorly-attached accessories...), automotive battery terminals often need to be replaced. This one was damaged by the winch ground wire clamped to its side. The terminal developed minor corrosion, which raised the resistance enough to cause a severe power loss during the high-current load applied by the winch motor. This power loss heated the lead terminal to melting, and the liquid lead ran down onto the plastic battery case. Fortunately, the molten lead didn't penetrate, and the terminal maintained enough integrity to continue to function enough for the vehicle to remain operable.
But without the clamping force applied by the bolt, the terminal is losing contact with the battery post, resulting in low voltage to the vehicle. Clamp-on battery terminals are very common, but they result in another poor connection which will likely have this same result (or worse). So a soldered connection is preferred.
Crimp-on battery terminals are available, and commonly used as OE. But the crimpers are expensive and hard-to-find. And a crimped joint doesn't self-seal like a full solder joint. Additionally, if a battery terminal overheats with a solder joint, the solder will melt, probably disconnecting the battery before further damage occurs. A crimped joint won't release, and the battery may explode or catch fire. Finally, crimped terminals can't be repaired in the field, and can never have additional wires added in, like solder terminals can. So soldered-on terminals are inherently better & more user-friendly.
. Motorcraft F2TZ-14301-B
Negative Battery Cable with body, frame, & block grounds
"Grounding" is commonly misunderstood...
When electricity first became publicly available (when Edison & Tesla were fighting over DC vs. AC), Copper wire was very expensive. So rather than run 2 wires everywhere, Tesla realized he could run a "hot" wire, and then use the ground (the actual dirt of the Earth) as the return circuit path. (He also thought he could use the ionosphere as the hot side, but he never got that to work.) Inside a house, there still had to be 2 wires, but one of them went "to the ground" via a Copper rod driven into the dirt outside the house. That became known as "the ground wire". When vehicles acquired electric circuits (AFAIK, the first on any Ford was the electric horn, which Ford always numbers as circuit #1), it was equally-efficient to use the metal chassis of the vehicle as one the main electrical pathway, to reduce the amount of wire needed. And the term "ground" was carried over into that arena. Chassis grounding worked reasonably-well until alternators got up into the ~100A range (in the 80s) and vehicle wiring harnesses began to exceed the weight of the drivetrain (AFAIK, the first to cross that line was the '92 Lincoln Continental V6). Since then, more circuits are networked through high-speed data bus lines via communication modules so that you don't need a discrete wire running from one end of the vehicle to the other & another coming back to turn on a taillight, and confirm that the bulb isn't burnt out.
But as a result, the chassis/body ground is no longer sufficient to provide a reliable circuit path without introducing a lot of background noise (RFI) into those minuscule high-frequency data signals. So the trend for a couple of decades now has been to run actual Copper return wires so that far less current flows through the chassis steel. (House wiring standards added a return "neutral" wire decades before that.)
So by definition, if you're using a wire to return to the battery, you're not "grounding" that circuit - you're wiring it. And wiring it is a good idea when you're dealing with rusty 40- to 50-year-old body & frame steel. The catch is that the return wiring has to be AT LEAST as large as ALL the power wiring that it serves - IOW, very big like the alternator output wire, the starter wire, the winch wiring, and the ignition switch battery-supply wires. None of it needs to be bigger than the battery cables because you can't ever get more current flowing than the battery can put out (roughly whatever its CA rating is).
So if you want to be sure you have a good return path throughout any vehicle, just extend the battery (-) cable all the way to the trailer connector. Obviously, you can't run a cable that big into the trailer connector or anything else - you have to splice onto it to branch off with smaller black wire (or whatever color the particular circuit uses for "ground"). That's why I refer to that as a "trunk ground" system - the main return wire is like a big tree trunk, with the variously-sized smaller branches shooting out to hit each point on the vehicle that needs an exceptionally-reliable return (generally: the high-current devices; and those that require low RFI noise, like audio amplifiers).
Fortunately, those splices DON'T need to be insulated - they can be left showing bare metal. Copper & solder don't corrode very quickly in air, or even in common rainwater. Mainly just at the battery where acid leaks out. Road salt will eventually cause some corrosion, but probably not enough to matter within the remaining lifespan of even the best-maintained antiques.
And the body & frame should still be GROUNDED at a few points, just to reduce galvanic corrosion, and to serve the very-low-current chassis-grounded loads like taillights & fuel level senders.