On 120 volts a 10 foot length of #10 copper wire will absolutely limit ground fault short circuit current to 10,000 amps even if the source is infinite and the return path is superconducting. On 240 volts single phase using a common trip circuit breaker 10 feet of #10 copper produces the same result.
Most short circuits and ground faults occur in utilization equipment that is far from the source. The high rated feeder fuses or main circuit breaker only has to take care of the minority of faults close to a panelboard. When faults are that close to a panelboard you probably want to have the main shut off anyways to keep a short from spreading to or inside of the panelboard. A large enough fault can turn wires into fireworks fuses so shutting off the whole panelboard very quickly on large faults can prevent a burndown.
In the case of a SquareD residential panelboard with a 200 amp main breaker with 22,000 amps interrupting and 1/2 to 1 cycle clearing on shorts at or above 2,000 amps, you still get coordination because on branch circuits the wire resistance keeps a short from reaching peak value until 1.5 to 3 cycles after a short occurs. That is, the maximum peak of a short circuit occurs during the first 1 to 6 half cycles depending on certain parameters such as distance from the power source.