Should this be like this?

No it should not be like that.

That is the fireman’s switch control wire from your heater to your automation panel.

I can see both ends.

Run a new wire or use waterproof splices to splice it together. I can see both ends.
 
Do you know what gauge the wires are?
Around 18 gauge is best.

The MasterTemp Installation Manual specifies using 18 gauge wire with a minimum 3/64” (1.2mm) thick insulation rated for a temperature rise of at least 105°C. The area the wire passes through can get hot and melt the insulation.

You cannot find that type of insulated wire in general hardware stores. So get wire with the thickest insulation you can find, and be careful with the routing within the heater. The thicker insulation will also protect the wire from that type of break,
 
Those wires being seperated I assume would not allow power to the heater. Is this correct?

Not exactly.

Your automation panel, type unknown since it is not listed in your signature, just closes a relay that completes the 24V circuit powering the heater controls.
 

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The Jandy pool control panel is about 9-10' from the heater.
Then this is correct:
The MasterTemp Installation Manual specifies using 18 gauge wire with a minimum 3/64” (1.2mm) thick insulation rated for a temperature rise of at least 105°C.