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The 120/240 volt limitation has been in place as long as I can remember. With a 120/208 system the grounded conductor is considered a current carrying conductor so you have 3 conductors producing heat. With a 120/240 volt system you only have the equivalent of 2 conductors producing heat.

Actually, the reason for the 120/240V limitation is that the code section was developed by using historical data provided by POCOs for the usage of power of dwelling units and only 120/240V systems were included.
 
What if service is 120/208v?

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I would say you are not out of luck if your locality is observing the 2017 NEC and the conditions of the rules below apply to your installation.

Quote from 310.15(B)(7)

"For one-family dwellings and the individual dwelling units of
two-family and multifamily dwellings, single-phase feeder
conductors consisting of 2 ungrounded conductors and the
neutral conductor from a 208Y/120 volt system shall be permitted
to be sized in accordance with 310.15(B)(7)(1) through
(3)."

So if your installation complies then in the 2017 NEC it does permit 310.15(B)(7) to apply to 208Y/120V Systems. Just remember you can't utilize 310.15(B)(7)(4) so selecting your wiring methods and the size of the grounded conductor has to be chosen correctly. Just depends on your install and I have to be honest I didn't read all the posts.
 
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