Q1 bypasses some of the current through the regulator. The base to emitter voltage dropped across R1 decides how much it conducts compared to the IC current. Q2 conducts when the voltage dropped Rsc is high enough and as Q2 conducts it 'shorts out' Q1's bias voltage. It makes a crude but simple current limiter, only allowing a little more than the regulator and R1 will allow if overloaded.
The formula for Rsc is misleading because it only takes into account the current through Q1. The Isc it refers to is really only Q1 current, some additional current will still flow through the regulator.
Brian.