My bet is that this is a very old service, more than large enough for the original intent. Then more loads get added (window ACs, space heaters, microwave ovens...) and by modern standards the service is woefully undersized.
Things work because of load diversity (each unit might draw 60A peak, but not all at the same time, so the average doesn't blow the fuse) combined with overload response time (if the highest usage of the day exceeds 500A for 15 minutes but the average usage is low enough then the fuse doesn't blow).
My guess: the system is working but if you meter it or do an article 220 calc you will find it needs to be upgraded.
Jon