Generally, there are 2 wires into that distributor plug/connector, ignition on power and a wire that sends a ground signal to the ECU to send current from the coil to the center distributor cap so the next spark plug can fire. Neither of the wires to the distributor plug/connector should be bare. I would trash the bare copper wire and crimp in a new insulated wire. After smoking, the bare wire is probably damaged.
I would also check for cross continuity/shorts at the ECU and distributor connector, by connecting the leads of the ommeter into different prongs/sockets of the connector.
I have seen bare wires used from the ECU mounting bolts to engine ground, but wires from the magnetic control circuit of the Distributor to ECU should be insulated.i