Actually since 160 is not a standard OCPD size you are permitted to use a 175 amp breaker. However, you must protect the secondary conductors at or below their rated ampacity, so changing the secondary breaker may also require you to change the secondary conductors.
Changing the secondary conductors would be very easy. So i guess i did interpret the table correctly.
Poor terminations/connections causing excess heating is a more likely issue.
Did the breaker trip under the same conditions:
Time of day?
Temperature in room?
Same loads turning on/off?
Time of the day i don't know, but the load is fairly constant throughout the day. And the temperature of the utility room i would (guess) to be around 70F.
When i was feeling for heat on the 125A breaker i noticed the upper side of the 125Amp breaker (A phase) was very hot compare to the C phase. So it could be a bad connection inside the breaker.
Thank you for your input.
