Great. So say you have a 1000A continuous load, and let's consider a few scenarios:
A) 1000A rated conductors, 1000A breaker, 100% rated. We agree that this is allowed. The conductors are rated for 1000A continuous current, as is the breaker. The breaker properly protects the conductors.
B) 1000A rated conductors , 1000A normal breaker. The breaker still protects the conductors, and the conductors are rated for the continuous current. However, the breaker is not rated for the continuous current, so it may trip. If that weren't an issue, this would be fine.
C) 1000A rated conductors, 1250A normal breaker. The breaker is now rated for 1000A continuous current, so there will be no nuisance tripping. But the conductors are no longer properly protected by the breaker, so not allowed.
D) 1250A rated conductors, 1250A normal breaker. Allowed.
As you can see, it's all about the limitations of the breaker, and the conductor upsizing is just a consequence.
Cheers, Wayne