Why did a failing water heater emit an electrical burning odor?
Electric water heaters have 2 components that can fail and cause the burned smell. The thermostat is constantly opening and closing electrical contacts after years of operating the contacts get eroded and cause a higher resistance then they heat up and arc this is probably what happened the breaker won't trip in this case because it is not drawing any more amperage but the heat generated is at the contacts not in the rod and thus the smell. The other common failure is the fire rod itself they crack from heat cycling and short out this will normally trip the breaker but not always if they just open. The rod failure is usually in the tank so no smell is usually associated with this failure but the wiring and thermostat can smell warm due to the excess current if it shorted.