Not quite right - it is a code for installation in walls, where the wires might not be able to dissipate heat efficiently.
The maximum amps a given wire can handle is an engineering problem and depends on design details. You figure this out by computing heat dissipation in the wire and finding cooling rate. Then you compute wire temperature in operation and compare it to max temp for insulation and the wire itself. Safety factors are needed in case a wire gets nicked, or ambient temperature increase, or other reasons. High temperature insulation (like PTFE) allows more current in the same gauge wire.
Take a look at the following chart:
https://www.powerstream.com/Wire_Size.htm
You see the difference in amps for chassis wiring versus power transmission ? This is because a wire in air inside a case is cooled more efficiently then a wire inside a wall.