Meaning that people that think those steps are more closely related to each other have this misconception:
Could some one quote the section that mentions that the 20 amp limitation on # 12 can be ignored.
With the limitation in tact that would mean 16amp load x 125% = 20amp.
With the general overcurrent protection rules a conductor must be protected at or near its ampacity. With motors only short circuit and ground fault protection is all that is necessary because the starting current is often higher than an otherwise normally sized device will allow.
People that balk at a 30 amp device protecting a 12AWG copper conductor need to see what kind of realities can exist for a large device protectinga small conductor and still be code compliant.
Example a 10 hp 480 volt 3 phase motor T430.250 says full load current is 14 amps. 14 x 1.25 = 17.5 minimum conductor size. 14 AWG is acceptable for 20 amps @ 75 deg.
T430.52 gives us maximum overcurrent device settings depending on type of device, exception 1 allows you to use next higher standard size device.
For the 14 AWG conductor allowed to be used it can be protected by:
max non time delay fuse = 45 amps
max time delay fuse = 25 amps
max inst trip breaker = 125 amps - yes a 125 amp breaker is allowed to protect 14 AWG
max inv/time breaker = 35 amps
Exception #2 to T430.52 allows these settings to be even higher if they do not allow starting of the motor.