Yes the wire size is designed for capacity and voltage loss considerations; however, I believe the ABYC standards and code goes beyond that "at the source". I recall that should fuse the line closer to the source to protect against (among other things) for a fault which might turn the wire into a resistance heater element? I recall there are requirements in this regard.

You can have within an electronic device (or otherwise) a short which would leave the battery unchecked sending hundreds of amp-hours into a a wire. There have been cases of large feeders for windlasses which were sized for voltage loss criteria that became the source of fires aboard a boat. (That's why many generally leave their windlass circuit breaker off when we aren't planning on using the windlass -- to cut the source of the powering of the cables close to the source.)