High amperage going through the wires, or a high resistance connection.
With the 130A alt, the #10 wires should not be used at all. Cut them back and tape into the harness. The #4 wire should all that is connected to the power lug and connected to the distribution block inside the fender (i assume).
As to why it's getting hot? You either have a TON of amps going through that wire and terminal, or the connection itself is really poor/loose. I've seen crimped style connectors like that done so poorly they barely squeeze the wire and/or make minimal contact with the copper or even corrode internally. Loose/poor connection causes high resistance and creates heat.
Do you have a fuse on the alt wire? If so, what size? #4 wire, depending on lenght of run, ambient temp, and if 90*C or 60*C wire is used, is really only rated around 100amps. I often see folks assume 130A alt means fuse at 130A, and that may be entirely too big for the wire size.