Power Diversion in NA

It’s quite in order to shorten them to make the installation neater, hence safer. As your installation stands, it looks relatively easy to quite inadvertently damage those wires - are they about 4 mm2? There’s only insulation covering them, no mechanical sheath, so if you get a line-line or a line-earth fault, the fault current will be limited to whatever the supply impedance is plus the resistance of that wire, and it will stay there either until the wire melts or the 200 A breaker trips.
If you can’t get the surge protector inside that cabinet close to the breaker, then a really neat and safe thing to do would be to get some self-adhesive cable clips and clip the wires neatly to the metalwork - up a corner on the back panel looks suitable - so that they are largely protected mechanically. Bill might however say that’s illegal too; but being pragmatic, it’s less bad than what you have.