I was asked a question and I have my own thoughts. I would like to hear yours. I hope I didn't post this question before, but here goes.
You have a nice 200 amp code compliant service. You want to add a generator so you install a nice big transfer switch with main breaker outside. So you change the service panel inside so that all of your neutrals are separated from the grounding conductors. Now the question:
The range was a 3 wire SEU wire. What happens to the neutral/ground conductor? Leave it with the neutrals? or the ground wires?
The same would occur with a dryer line if/when you used the old SEU wire for that. (Which around here was pretty popular years ago.)
What happens if you want to install a transfer switch before the service and the whole house is finished? there is no way to run a new 3 wire feeder to the stove, then what are you suppose to do? Not install a generator? Or rip open finished walls in a house in order to run the proper cable? Is there a happy medium between the two choices?
Generally if this was not in the scope of the new permit, you don't see it. Just like the lack of AFCIs or other things we can allow on the grandfather cause
If you did want a totally compliant new generator installation (all other things being OK; You could choose to install a sub with transfer equipment for the emergency generator circuits (without the dryer) or You could use non-SDS transfer equipment where the neutral is not switched and the main bonding jumper stays in the current service disconnect. or You could extend the dryer SEU to a breaker in your new "main" panel. where the service disconnect and main bonding jumper resides.
There may be other solutions too but chances are nobody would ever care if you just left it alone. I do tend to agree that this has always been a potentially dangerous exception, even though we did not really pile up bodies and NFPA did well to get rid of it.
Most transfer switches around here only switch the phase legs and the neutrals are almost always left tied together. So this is not a true separately derived system. Another question some EC's ask me is if they should leave the bare stranded neutral/ground on the neutral bar or the grounding bar. Since now the main service becomes a sub panel with a main breaker.