Let’s address questions that have been raised about the allowed methods to comply with section 250.148 when installing branch circuit wiring with devices in metal device boxes

I am having trouble interpreting Section 705.12(D)(3) [NEC 2011] and the exception to 705.32. Specifically, I am having issues with the exception.

My accomplices and I have made up a mock service diagram to be used in an educational program.  The electrical service is rated 4000 amps at 120/208 volts. We are supplying the service equipment with 12 sets of 600 kcmil aluminum type THWN per phase.

My main concern for this particular installation is in reference to 690.64(B)(2). The new 400-amp subpanel is being supplied by 400-amp disconnect which is fed by a line side tap ahead of the service-main disconnect.