Rheostat power rating vs. current rating
The power rating for a rheostat applies only when the entire resistance is in circuit.

The heating only occurs in the bit of wire carrying the current. If only half, or 10% of the wire is in circuit, then cooling only takes place on that half or 10%, and the power rating is proportionally lower.

This variable area for heat loss is taken account of by giving the rheostat a current rating. At 150mA, \$I^2R\$ gives 22.5 watts (more or less 25!) for the entire 1k\$\Omega\$, but only 2.25 watts for 10% of the resistance and 10% of the heat loss area.