Great discussion. Based on what I am gathering, the conclusion is that because 240.4(B) only explicitly permits the next higher "standard" OCPD above the ampacity of the conductors being protected, one could argue that adjustable settings are not applicable to the next size rule. However, because the adjustable setting can be less than the next higher standard rating, and still be above the ampacity of the conductors being protected, one could justifiably select any adjustable value up to the next standard size, given that equivalent or better protection will be achieved.
The question now is what is so special about standard ratings? is it possible that the purpose of using the "standard rating" terminology (AKA frame size) is to limit the maximum possible rating/setting for the circuit in the event of tampering? Refer to 240.6 (B) and (C) as well as 240.4(B)(2) (the part about overload trip adjustments above its rating) for possible supporting reasons...
Thanks in advance.