Sorry but I am with Kent on this one.
If the appliance is UL listed you have no say as to it's legality. As a unit it is perfectly legal, it's intended use is dry/damp locations. If someone mis-uses it it is their problem. If you really wanted you could apply for a job with OSHA and write up people for using their gensets in the rain.
Also, since when is this type of generator "installed". A Gen-Tran panel is a different story.
Also, 406.8(B)(1) states "...receptalces installed outdoors in a wet location...". The receptacles is not "installed" outdoors. It is installed on a portable device.
At the same time you can say just using the generator in a wet location is a code violation since you are not supposed to subject a generator to rain or direct weather. Since this is the case the receptacle on the generator is considered a damp location, not wet.
George, you are actually going to bring this up with UL and Genreac?
"Anyone who has never made a mistake has never tried anything new." -Albert Einstein