You did not explain anything:
1) Is low voltage distribution system AC or DC and what is its current?
2) Protection from what?
3) What is the "fault current" and what causes it?
I do not know if he is referring to this, but in a mono-phase transformer, the fault current is when the secondary windings are short circuited.
So I guess in his circuit, maybe if there is some short circuit problem.
It could be that the voltage regulator in the generator maintains the output voltage, so effectively removing part or all of the internal impedance of the generator.
Or it could be that the generator is part of a national grid while the fault current is on just one sub circuit connected to it.
Frank
Should define low-voltage distribution system. I guess it's meaned that the actual fault (=short circuit) current in public utility grid is mainly determined by transformer impedance, specifically x percent, to a lesser extent by the last mile(s) low voltage and mid voltage cables.