OOPS!
George, I have to give you credit for catching me in a goof!
I will put some of the blame on the wording of the code itself. 240.21(B)(1) starts off by saying "and the tap conductors comply with ALL of the following...."
Condition (2) says "conductors do not extend beyond the switchboard.." This is where I stopped reading.
Which is a pity, as condition (3) says "the conductors are enclosed in a raceway..."
Kind of hard to enter a raceway without exiting the switcjboard, if you ask me! Yet, the code does say "ALL!" Poor grammar, I expect, and I agree with your interpretation.
