This deviation . . . . 2/0-awg-cu for a 200-amp 120/240-volt residential services(3 copper conductors in a raceway or cable) for R90 / RW90 / T90 Nylon / & MI Cables shall apply for 200-amp residential services....ONLY.
If in your case a 400-amp service was required for a 120/240-volt residential service, then if you were to observe Table #2 - (3 copper conductors in a raceway or cable) for R90 / RW90 / T90 Nylon / & MI Cables, then 500-kcmil would be acceptable as a service entrance conductor.
Rule 8-106 Use of Demand Factors
(1) The size of conductors and switches computed in accordance with this Section shall be the minimum used except that, if the next smaller standard size in common use has an ampacity not more than 5% less than this minimum, the smaller size conductor shall be permitted.
Rationale and Intent for Rule 8-106(1). Switches and conductors are rated in standard sizes, and in some cases the use of conductors and switches with ratings less than the calculated load may be suitable.
We intend that the calculated load, as calculated in accordance with this Section, be the minimum size of conductors and switches. Rarely is the calculated load the same as the standard ratings of switches and conductors. We intend to establish conditions that can be used to accept standard size electrical equipment that is slightly smaller than the calculated load. For example, use 210 A calculated load; 5% of 210 = 10.5 A and 210 – 10.5 = 199.5 A.
In any case other than a service calculated in accordance with Rules 8-200 and 8-202, where the design of an installation is based on requirements in excess of those given in this Section, the service and feeder capacities shall be increased accordingly.
Rationale and Intent for Rule 8-106(2).
The CE Code, Part I, is based on minimum requirements and is not intended to limit design. It is important that services and feeders be adequately sized for the actual loads they must carry. We intend that for services, other than those calculated in accordance with Rules 8-200 and 8-202, where the electrical installation is based on requirements in excess of Section 8, the service and feeder capacities be sized to meet the requirements of the actual load, regardless of Section 8 requirements.