You've highlighted a key difference in how overcurrent protection is applied in the NEC, and it boils down to the specific rules for feeder/service conductors vs. branch circuit conductors.

Here's the breakdown: Feeder/Service Conductors and "Next Size Up" Rule (240.4(B)): This rule allows you to use the next higher standard overcurrent protection device (OCPD) rating above the conductor's ampacity if all of the following conditions are met:1. The conductor's ampacity does not correspond to a standard OCPD rating from 240.6(A).
2. The ampacity of the conductor is not more than 800 amps.3. The next higher standard OCPD rating does not exceed the conductor's ampacity by more than the values allowed in Table 240.4(B)4. This rule does not apply to branch-circuit conductors supplying more than one receptacle for cord-and-plug connected portable loads Example

A 500 kcmil conductor rated at 380 amps can be protected by a 400 amp OCPD. The 380 amp rating does not correspond to the standard OCPD ratings listed in NEC 240.6(A), which do not include a 380 amp OCPD. Because the conductor is not 800 amps or greater, and because 400 amp is the next standard size up that is under the 380 amps allowed in table 240.4(b)

Branch Circuit Conductors: Branch circuits have stricter rules: 240.4(D) lists different conductor types and their overcurrent protection requirements. This section specifies that #14 AWG copper must be protected at 15 amps, #12 AWG copper must be protected at 20 amps, and #10 AWG copper must be protected at 30 amps. 240.4(D)(3)

"If the ampacity of the conductor does not correspond to a standard overcurrent device as described in 240.6(A)(1), the next higher standard overcurrent device shall be permitted only where all of the following conditions are met:(1) The conductors are part of a multioutlet branch circuit supplying receptacles for cord-and-plug-connected portable loads.(2) The ampacity of the conductors does not exceed 20 amperes.(3) Overcurrent protection is limited to 20 amperes."In the case of a 21 amp conductor on a branch circuit, you're dealing with a different situation because that conductor is being used to power branch circuits that use receptacles.

In Summary:

The "next size up" rule is primarily intended for feeder and service* conductors where slight over-sizing of the OCPD provides a degree of application flexibility where conductor ampacities do not match standard OCPD sizes. Branch circuits, especially those with receptacles, are subject to stricter rules to enhance safety for end-users. Flag for review