Electrical wiring - 220v?

Not to worry.

1. Those short runs to the elements will have insulation rated for higher temperatures,

and thus can carry higher currents in smaller wires.

2. "Elements": If there's more than one, each load is less than the total

supplied to the unit by those '#12' s

3. Those 'Code wire sizes are based on how well wire in cable or conduit

can shed heat to ambient air. -Those wires in the unit are in 'free air' right?

4. If it's got a 'U.L. Label, it's been looked over by people who know more

about it than you, or even I do.

There are separate codes for dealing with the internal wiring of appliances. This is due in part to the short runs and the accessibility of parts. House wiring is required to have a certain amount of over protection so that the system can handle faults better. If an appliance fails, you simply have to replace or repair the appliance. If the house wiring fails, you are often dealing with possible demolition of permanent structures such as walls in order to fix or replace the damaged circuit.

Heat may be another factor. Heat increases the resistance of wires and as more current flows through the wire, the more it heats up. Wires in cable (romex) or conduit don't dissipate heat as well, so a heavier gauge of wire must be used to compensate. Wires inside of appliances can be run individually, allowing plenty of air circulation around each wire.

Your run to the heater must be able to handle adequate current for both heating elements simultaneously. The wiring inside is only handling current for a single element. The length of the run has nothing to do with it.