The C128D modulator uses 5V for power supply, and the composite output (pin 4) is driven with luma signal via an emitter follower and a 120 ohm resistor, and with chroma signal via an emitter follower and a 150pF capacitor.
Normally the composite output is disconnected when using the RF modulator, but when using the composite output to a TV, it will be terminated to ground via 75 ohm resistor.
In this case the faulty cable just directly connected it to ground.
So calculating the rough worst case scenario is that there is 5V over the resistor only 42mA flows, dissipating 208mW.
In practice, the highest voltage that an emitter follower can reach is about 4.3V due to about 0.7V Vbe drop, and luma output most likely cannot reach such high levels as it is unlikely that the white level is biased so high. The chroma capacitor would be shorted to ground, but it is charged quite quickly.
Therefore the chance of damage is very small.
After all, the making of the composite signal happens in the RF modulator before being RF modulated, so that is a sign of composite output being OK.