It seems it is more complicated.
I have now spoken to someone at Orion about this, and they have assured me that they have used this ESC with a 5.5T motor in a TC, with lots more space and airflow, and also more grip, which keeps the temp down on the motor.
Also, after speaking with Nick at demon (where I bought it), he is sending me a fan for it
, so I'll try it with that and a heat-sink on the motor (if it'll fit). Probably try cutting the shell a bit more too.
The other issue for me, is that it could easily be the motor that is making things worse, as I bought it second-hand, and haven't tested it properly. What is there that can be 'wrong' with a brushless motor? It's not like there are brushes to be worn out. If I could try with a different motor, at least I could narrow the problem down.