With the fault on the 12.5 kV bus, there are parallel paths in the sequence networks. One is through the power transformer to the transmission system source. The other path is through the step-up generator transformer to the generator.
In the zero-sequence network, there is an open circuit on the delta side of both paths; on the transmission system side of the power transformer impedance (the power transformer is delta-grd wye) and on the generator side of the generator transformer impedance.
There is a short to neutral on the wye side. This short to neutral on the generator transformer provides a path in the zero-sequence network. There is no path on the generator side of the positive- and negative-sequence networks because the generator side breaker is open.
The only path on the generator side is in the zero-sequence network, so only zero-sequence current flows through the generator transformer to the fault point. The total fault current includes all sequences, but not the portion flowing from the generator transformer.
Looking at it in a more physical manner, consider that with the generator side breaker open, there is no line current on the delta side of the generator transformer. The current in each delta winding must be the same because the the windings are in series with no other connections. The current "circulates" in the delta. The current in the high side wye windings are directly proportional to the current in the low side windings, so they are also all equal.
The line current from the generator transformer in the unfaulted phases goes through the 12.5 kV bus, through the power transformer windings to neutral and through the racoon to the faulted phase.
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