Is 10/3 NM stranded or solid? If it were solid I'd say there are good reasons for NOT wiring devices like water heaters with NM. Reason why it is illegal in all European countries I know of: the cable is not continuously fixed to a solid surface. Thus, if the cable gets moved the wire might break, creating a huge fire risk. I admit that's unlikely with items like a water heater (gas boiler controls are usually hard wired using solid wire here too even though it's strictly speaking illegal).
