Bruce,
It does not appear that the juction box was bonded so there was no fault clearing path to cause the breaker to trip. The high resistance connection was producing high heat but not pulling enough current to open the overcurrent protectiive device. These types of problems will not trip the breaker until they burn off enough insulation to become a ground fault, or a short circuit and only at this point will the overcurrent protective device open the circuit. If the box had been bonded to the equipment grounding conductor, then when the wire nut insulation melted, then might have been enough contact between the hot wire an the box to trip the breaker.
Don
