Well the point is its not a good idea, if it were then all AC cords would have loops in them. The main reason is as you put it, it creates a type of resistance that produces heat and is probably a good fire hazard as well.
Another can of worms is not having a ground....where is the ground reference for your voltage if you don't have one?
I made a joke out of the AC cord loops because it is one.....don't bring up another....lol
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