But the code does not seem to forbid it. Plug in the values of 400A, 120V, 750kCM single phase circuit inNothing in your example is real.
1. No where I have ever seen or witnessed a 400 amp 120 volt circuit 1000 feet long. Anything requiring that much power at that distance is going to be 3-phase operating at much higher voltage.
2. 1000 feet of #3 AWG is .2 Ohms not the .3 you mention.
3. If the supply is 1000 feet of 750 the total combined impedance is of the 750 and #3 is .217 Ohms impedance resulting in 120 V / .217 ohms = 552 amps. Even if you could drive a rod to get 10 ohm's impedance would do nothing.
4. At the point of contact the 750 MCM impedance is so much lower than 3 AWG the voltage will be 552 amps x .2 ohms = 552 amps x .2 ohms = 110 volts at the point of the fault.
5. A 1000 feet circuit using 750 MCM with 400 amp load current would have a voltage drop of 14 volts or 12 % voltage drop.
6. Not compliant to any known code or practice. Minimum EGC for this make believe circuit would require a 250 MCM which would create a 2400 amp fault current which would operate the OCPD instantly.
Nough said.
http://www.electrician2.com/calculators/wireocpd_ver_1.html and see the results.
Regarding your points 3&4: You are correct that the resistance of #3 EGC wire is 0.2 ohm. But still the voltage drop due to PARTIAL insulation breakdown is assumed to be only 60V for which the ground fault current is 60/0.2=300A, which is not likely to operate the OCPD quickly.