OK, I see where they are going. Yes, an impedance, the more inductive the better, on the front end of the rectifier will lengthen the duration of the current pulse, diminishing the peak of the current pulse. That diminished current peak will make for for less voltage distortion due to voltage drops across other impedances further upstream. My point about stiffer power systems, which would be lower impedance, is that if there is minimal impedance, there is minimal voltage drop. One is an attempt to reduce the production of harmonics, the other is a means of making the harmonics a moot issue.
In a sufficiently stiff system, the current distortion would not become voltage distortion. What your quote from Square D is doing is moving enough impedance into the device, at which point distortion is not a power system concern, to flatten out the current pulse. If you rely on source impedances shared by multiple loads, you then have issues with each load impacting the other loads. Low impedance for the common portions of the system and a high inductive impedance on the front end of the individual load. Shunt capacitance in addition to the series inductance can also help by supplying energy into the rectifier when the current it being limited by the inductor.
I think waross's summary is reasonably accurate.
The transformers that Engcan was asking about are intended, working in pairs, to cause the 5th and 7th harmonics through one transformer to be 180 degrees out of phase, on the primary, with the 5th and 7th harmonics through the other transformer to its primary. In the common supply system those harmonics then cancel to a large extent. The third harmonics were trapped in the delta primaries, so the primary circuit feeding the two transformers will have a much lower harmonic content than the primary feeding either transformer alone. The primary feeding a single one of these transformers will have all of 5th and 7th harmonics, but none of the third harmonics present on the secondary side.