Hello testech
You have confirmed that the motor is connected in delta.
When I look at the current waveform, it is apparent that the whole waveform is distorted, not just the flattened top.
The current flowing in phase 1 is made up of the sum of two currents, the current flowing through a motor winding betwteen phases 1 and 3, and the current flowing through a motor winding between phases one and 2. These two currents are displaced by 60 degrees from each other. If you are able, measure the current waveform flowing in one winding. This current will be less than the line current, but I expect that this current will show the peak on the crest of the waveform.
This flux saturation of the iron will result in an increase in the heat dissipated in the iron, but provided that there is adequate cooling, there is no issue. In an air cooled motor, the onset of saturation will cause a rapid rise in frame temperature.
It is common for very small air cooled motors to be operated in the region of the onset of saturation. This increases the heat, but due to the ratio for volume to surface area, the effective cooling is much higher and no problem results except where these motors are operated above their design voltage. Submersible pumps also operate with a much higher flux density than air colled motors because they are liquid cooled.
I look forward to seeing the winding current waveforms.
Best regards
Mark Empson