With regard to domestic the demand on the supply is normally too low for the issues of eddie currents to have a runaway effect .. you would be looking at demand in excess of 200amps for a dangerous situation, there was a recent thread on this and the main contribution to this effect creating a problem is when there is a metal sheath or armour grounding to the metal box ...MICC, SWA, Conduit etc this magnifies the effect and this is where even lower range currents can generate excessive heat due to eddie currents .... I have never seen any issue with <200amp where the cables don't have an earthed sheath or mechanical protection that is grounded 'at the switchfuse in this example'.
I thus don't rate it as a C2 but from a regulation point of view that just have it as a blanket issue then yes it can be seen as a code 2.