As the conductor fill in the 2-1/2" conduit is in violation; correction of that has to be made. So, while increasing the conduit size, I would relocate it to the adjacent distro panelboard.
Is this gear a 'service'??
As observed from the pics, it appears that the conductors are within the barriered area (line side) of the main gear section.
This can be a POCO issue, IF the CTs are within the 'barriered section'. This could also be a violation for failing to follow mfg instructions.
