There is no requirement to break the grounded conductor (neutral) at the transfer switch, but if you don't transfer the neutral, you must disconnect the internal neutral to frame or ground connection at the generator. In most small residential use generators this connection is not easily removed.
The handle of a braker does not operate with enough force to reset another breaker when it trips. Also it is very very unlikely that a generator can provide enough short circuit current to cause a breaker to trip on short circuits. A braker requires 500% to 600% current to trip on a short circuit. The generator cannot provide this amount of current. It may trip after time on overload, but most likely the engine will stall out due to the high electrical load.
Don(resqcapt19)
