Ultimately, we're back to the schitzoid position the NEC takes on the safety of NM. Is it safe, or not?
Increased allowed uses of NM suggest that it has proven itself to be safe.
Increased limitations - no damp locations, AFCI required - suggests that it has proven to be unsafe.
Which is it?
Ditto for all the engineering wonks who ponder the possibility that the paper in NM might get wet. So what if it does? The paper is around the GROUND wire. All moisture would do is improve the chances of everything having a good bond.
Inspectors twisting the code to enforce their own design biases is nothing new - and it seems to be more of a problem the less accountable or knowledgeable the inspector is. This problem will only worsen as ever more rules are extended to the legal parts of the industry. The hacks will, perversly, gain an advantage.
Closer on point, I think it's time to do away with the very concept of a 'damp' location.
