Can over heating cause permanent damage?

Shorted motor windings are not worth fixing. I used to install repaired waste pumps costing $3000 new, but they weren't fixed right either. Apparently the shop pulled windings off until the short disappeared. Height the "repaired" pumps would throw waste water was measurably lower. These bicycle motors are <$400, not worth fixing a shorted winding.
I burnt a bafang geared hub motor on the 60th hill of a 77 hill route last year. It did not stink. I don't take that route anymore with a duplicate motor, but I'm going to have no choice after June 6. State hwy dept is going to reduce lanes to 100" in a construction zone on the flatter route. Ever been passed in a 100" wide lane by a pickup & lawnmower trailer? Almost hit me.
Ordered a 500w MXUS motor from ***** yesterday via ebay. Hopefully it is less sensitive than these bafang motors taken from the Uber jump fleet that was scrapped.
we removed the cassette, but the very small screws did not want to release! So we stopped!
OK thats because you have a motor that has had loctite applied to it. Occasionally you get that. I've overcome this before.

Most likely yhour only recourse will be to swap in a good motor core into your existing wheel.

First, get yourself a heat gun. Set it on its lowest setting and direct the gun's output to one of the screws. Don't do it for more than a couple of minutes. Then, once its good and hot, carefully (don't burn your fingers) try and remove it. Once I did a motor with Phillips head screws and after heating it I (gently!) tapped the hot screw with an impact wrench that had a Phillips bit in it. There was no way it was coming out even with a screwdriver after heat was applied but the gentle twisting that came with an impact wrench got it smoothly and safely out.

Note I am NOT talking about a power tool here. The impact wrench is what looks like a fat screwdriver below. Hitting it with a hammer creates a sideways twist in addition to the impact downwards. Usually these tools are hammered hard. Don't do that. Also note the padding I had that went under the motor, since I was going to be using a hammer. The motor was sitting on the bricks, the heat gun directed at the one screw, and the impact wrench was used immediately after moving away the heat gun.

The heat gun can probably be substituted with a hairdryer running at full blast. And you can try just a screwdriver although that did not work for mine.
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Yes, over 120 degree C. You can melt wire insulation or demagnetize neodymium rotor magnets.