So, the 125 kVA exception as been replaced with a statement that "Sustainable arcs are possible but are less likely in three-phase systems operating at 240 V nominal or less with an available short circuit current below 2000A."

Does this mean that likelihood of occurrence is "No" as in 70E Table 130.5(C), and that PPE is not required? If not, what do we do with this new information?

The intention from everything I've seen is that this is kind of like the waffling on the 50 V rule in 70E. 70E suggests that some how, some way a lethal shock might be possible but they can't provide documentation of a fatality. So this is waffling on the lower cutoff rule. It might be possible under extreme circumstances to sustain an arc AND the arc might make it to 1.2 cal/cm2 but it about as likely as a shock fatality at under 50 VAC. Academics and the legal beagles are getting in the way of a clear statement here.

""Academics and the legal beagles are getting in the way of a clear statement here." I totally agree. We have to be realistic about the hazards. I am not sure that our clients are going to want to pay for AF labeling for these areas.