On my 76 CB550F, it was toasted when I got it from the junkyard 20 years ago. A complete bike junked for electrical problems.
The green wire from the rectifier was melted from the rectifier all the way to coil ground point, and had to be replaced entirely.
The over current found the weakest section to melt through the insulation and its neighbor wires, fusing 4 or 5 together up near the spine just in front of the seat. I don't know if that position is going to replicate for every bike. And, I don't have specific knowledge that the battery leads were reversed on my bike, since the damage occurred before I got the bike. It just seemed like the most likely failure cause scenario, as the original rectifier still works fine to this day.
I will say that the thick green jacket you show in your pictures was not present on my bikes, as I recall. Have you already started disassembly? If not, I suspect prior tampering.
You can troubleshoot which wires are shorted together from end points and probing the connectors. Disconnect the circuits at both ends. But on mine, with careful examination, I could see some distortion in the wrap. Subtle, but there just the same.
FYI, I never removed the harness for my repair. I just unwrapped and replaced the bits fried with it still attached to the bike.
Cheers,