Sounds like you started with the pot at 1 meg and as you turned it the resistance droped toward zero. Initially you'd have what looked like a 1,000,024 ohm total resistance so very little current flowed with 12 volts applied. The I 'squared' R loss of the pot was trivial. As the pot was turned and the total series resistance dropped the current increased to a point where the pot couldn't handle it. At about 200 ohms the pot is somewhat past it's rated dissapation - but all of that dissapation is in a very small segment - I don't know how pots behave in that situation.