This would not be an NEC issue, as it does not require the Disconnect to be located outside, or does it to update the electrical when you repair something.
But requiring the service to be upgraded to the latest codes because of a needed repair would be against the US Constitution, article 9 section 21 states "No Post Facto Law Shall Ever Be Enacted" which is to say you cant require bringing up to code something that met code at the time it was installed.
But now you have a dilemma, which we call "know when to pick your fight"
If this is your house, well you could fight it, If your the contractor, if you fight it, you hold up the job and the home owner finds someone else to do the work, and the inspector nit picks every job there after.
I have run up against this many times, and I place it in the home owners lap as to which way they want to go. we have a few city's here that try to require a house to be brought up to code if the power has been off from more then 90 days, well two have been sued and lost, with payouts for lost use of the home. it was a layer who went to Florida each winter for 5 months, and comes back only to have the city block the POCO from turning the electric back on till the house is brought up to code. He won hands down.
But like I said in some situations its more cost effective to just do the what is required and leave it up to the home owner to choose what they want to do.
I relate this to a car, if we have an old car and need a engine replaced, would EPA require it to meet the latest pollution standers? DOT require it to meet the latest safety standards. I don't think so!.
well if they can't get past article 9 section 21 then how is it a local inspector think they can?
