The inspector suggests that rule 14-606 must be applied to the conductors. I disagree that the rule about panels applies to conductors.
I agree that this rule does not apply to conductors; it applies to the protection of panelboards.
If you are feeding a panel board and the inspector's concern is for the protection of the panelboard, then I could understand how rule 14-606 would apply and either a panelboard with a higher ampacity or a smaller fuse at the primary of the transformer would satisfy rule 14-606.
If you are feeding some other type of load other than a panelboard then I would think rule 14-606 has absolutely no bearing on your situation.