Every fuse has a limit of how many amps it can safely interrupt. Exceed that, and this is what happens.
All it takes is a dead short - and more fault current available than the fuse is rated to interrupt. That's what all those 'fuse classes' are all about.
It's possible that the wrong type of fuse was used, but more likely that the fuseholder selection itself wasn't correct.
It's also possible that the PoCo made some changes - a new transformer, etc., that led to more current being available then there was before.