Jim,
Not quite sure what you did but the battery heater needs to be supplied through something like a Victron BP65 or similar controlled by SBMS0 EXT IOx set as type 2
Not quite sure how a heating element can fail but if it did and you had a low temperature limit set then yes the SBMS0 will stop all charge and discharge sources as any temperature limit (high or low) is considered a fault.
I also do not understand what your solution was as you mention the heating element is controlled by the SBMS0 EXT IOx but that was also the case before so how is now any different ?
Battery box should be designed so that battery is always kept above freezing then you will not have any of the mentioned problems. If battery is not well insulated then battery will either get cold or you will spend more energy than the battery contains trying to keep it warm.