Deja Vu.
This sounds similar to arc resistant switchgear a few years ago. It was designed to contain the arc and be "Category 0" regardless of what the calculations indicated. Most people would accept the category 0. However until recently, 70E never officially acknowledged the arc resistant design.
Sounds like we're going down that road again with the Arc Terminator design. I would make sure you get something in writing from the manufacturer to back up (CYA) the category 0 rating. I'm not sure I would change the arc flash model though.
I know there are a few switchgear guys that hang out here as well. Maybe they will have some other good info to add.