On a diesel/electric generator, the circuit breaker is performing double-duty. It not only protects the windings in the generator, but also the engine itself.
The windings in the generator are capable of sustaining 1216 amps regardless what the powerfactor is. The diesel engine is capable of delivering 350 kw (which is equal to 470 horsepower). The circuit breaker is sized to protect the whole system. With a purely resistive load, the circuit breaker will trip when the engine experiences 360 kw, even though the windings in the generator are still capable of taking another 200 amps. It is designed to protect the system in a worse-case situation.
Edit to Add: Sorry templdl. We cross posted. Please note in the OP's question that he is referring to the on-board factory circuit breaker of the generator. Not a subsequent downstream breaker.
Second Edit to Add: By the way, the fact that the breaker is rated for 100% it means you are not required to derate it for the typical 80% loading in the NEC. You can pull the full 1000 rated amps out of the system continuously.