how is it that at 1000 INST the level is 1, but if INST is 1200 it jumps to level 3? worst case arcing fault is 4005A so I assume anything under this and it trips instaneously. no other sources or motor loads in the circuit

Take a look at your arcing fault numbers...

Mike

Protective device clearing time defines the arc duration. Elaborating on what mparenteau stated, the device clearing time is a function of the arcing fault current and devices time current curve. The clearing time has the largest effect on the incident energy. i.e. clearing time doubles = incident energy doubles. Also, IEEE 1584 has an arcing current variation factor so if the arcing current is slightly to the right of the instantaneous, the adjustment could push it just to the left resulting in a longer duration.

I did look at the arcing fault, both values are to the right of the INST settings. So I was thinking it should trip, but as Jim mentioned below it may be due to the tolerance used not only in the equations, but in the breaker characteristics as well. This one in particular shows =-20%

Is there a way to determine what SKM is using for the arcing current? Because I still don't see why its not tripping even at 1200A INST