You've hit on the reason I'm so puzzled by all the confusion / panic when someone is asked to do an 'arc flash calculations.' This is the same calculation we - and especially EE's- are supposed to have been doing all along. That is, calculate the available fault current.
The short version is that the OCPD's need to be able to open under the highest available fault current. Switchgear needs to be designed to function under those currents. "Selective coordination" isn't a new thing, either.
The 'fly in the ointment' is that at some point you need to know the specifics - especially the impedence - of the PoCo transformer, and your distance from it.
Let's imagine a factory. At the service disconnect, you calculate 65K available fault current. This means your service disconnect needs to be rated for 65K AIC.
Now, let's go a hundred feet or so downstream. Because of the influence the distance has on the calculations, these panels might need to be rated to only 35K. By the time you reach the motor starters, the required AIC might very well be under the 'industry norm' of 16K.
So what does "AIC" mean? It means that the breaker or fuse will open, or interrupt, that much current without endangering folks around it at least once. The device might never function again, but it didn't blow up.