Kitchen Large Electric Appliances - Strange dishwasher wiring

I'm replacing my dishwasher, and the previous owner has a wiring configuration I don't recall seeing before. He has an electrical cable coming in from a nearby outlet, hard-wired into the outlet. But there's also another cable going out from the dishwasher. Basically, I have one wire in (coming from the outlet under the sink), another wire out, and the dishwasher wiring all connected together with wire nuts under the dishwasher.

Unless I'm misunderstanding something, it looks like he's wired the dishwasher electrical into a series of outlets. The outgoing wire disappears into the drywall, so I can't tell where it goes.

This looks strange to me, and seems like a bad idea. Has anyone ever seen this before? The current cables are too short, so I was planning on just replacing with a longer cable, but now I'm concerned about what happens if I disconnect the cable going into the wall.

Turn off the breaker to dishwasher and see what else doesn't work.