From
https://iaeimagazine.org/magazine/2...-circuits-got-clean-grounds-or-dirty-grounds/
Installing Isolated Grounding Circuits
For a truly clean isolated (insulated) equipment grounding conductor, the insulated equipment
grounding conductor must remain insulated all the way to the point of grounding at the applicable
service or separately derived system. Does it have to, in order to meet the provisions of Section
250.146(D)? The answer is no. Section 250.146(D) is permissive text which allows the insulated
equipment grounding conductor to pass through one or more panelboards or other enclosures without
a grounding connection so as to terminate at the grounding point at the service or separately derived
system. Similar provisions are located in Section 408.40 Exception.
Obviously it is better from a design standpoint to keep this isolated (insulated) equipment grounding
conductor all the way back to the source or service, but in meeting the minimum requirements of the
NEC, it is not necessary to connect at that point, but it definitely is required to be connected to the
equipment grounding conductor of the system at some point to meet the requirements of 250.4(A)(5).