I see the last sentence negating the first and if we use 250.186(B) the engineer has another part of the design wrongSince the generator/standby system is an impedance grounded neutral system, the neutral is required to be fully insulated with the same insulation as the phase conductors: ref. 250.186(B). I understand a neutral conductor is not run from the generator.
And per the drawing the insulation level would be the same using the THWN.However, because the transfer switch is three-pole with solidly-connected neutral, the neutral (grounded) conductor from the service must be equivalently insulated because the code does not relinquish the requirement when the source neutral is not run to the system disconnecting means.
Maybe, but that is not what he has here and if that was his thinking, why didn't he include that in his message?As for the grounding conductor, I speculate this must be the engineers' concept of a Multigrounded Neutral System: ref. 250.184(C), and being it establishes a parallel neutral current path, they want it insulated from the conduit embedding concrete.
I need to be fair and point out that by his own admission he and his firm do very little MV design.
Roger