You've correctly identified the significant dangers of a 3-wire subpanel feed with bonded neutrals and grounds, particularly in the context of a lost neutral. Let's break it down step-by-step

Scenario: Lost Neutral on 3-Wire Subpanel Feed (with bonded neutrals and grounds in the subpanel)

1. Load Imbalance

When the neutral conductor is lost, the 120V loads connected to different phases (L1 and L2) will no longer have a consistent reference point. The circuit becomes a series circuit with two loads. Voltage across each load will now be dependent on the resistance of each load.2.

Voltage Division Based on Load Impedance

The voltage will divide between the 120V circuits unequally, inversely proportional to their impedances. Circuits with higher impedances will get a larger share of the 240V, and vice versa. This can lead to:

Overvoltage

Some 120V devices receiving higher voltage than they are designed for, potentially leading to damage or failure.

Undervoltage

Other 120V devices receiving lower voltage, causing them to malfunction or not operate at all.3.

Current Flow Through Grounding Path (Shock Hazard)

This is the critical part. Because the neutrals and grounds are bonded together in the subpanel, the neutral current now has an alternative path to return to the source: the equipment grounding conductors (the metal conduit, the ground wires in cables, the metal enclosures of appliances, etc.). This is because the neutral conductor is missing.4.

Energized Metal

This current flowing through the equipment grounding system will energize all bonded metal parts. Anything connected to the grounding system (appliance housings, metal pipes, etc.) becomes a potential shock hazard. If someone touches a grounded object and simultaneously touches a source of voltage, they will complete the circuit and receive a shock. The severity of the shock will depend on the amount of current flowing through the grounding system.5.

Parallel Ground Paths (Won't Help Much)

You're right; the grounding electrode system (ground rods, water pipe bonding) creates a parallel path to ground. However:

High Impedance

These grounding paths are designed for fault current (short circuit) conditions, not as a primary return path for neutral current. They have relatively high impedance compared to the neutral conductor.

Limited Current

They will carry some current, but not enough to prevent the majority of the neutral current from flowing through the equipment grounding conductors. They might help slightly reduce the voltage potential on the metal parts, but the shock hazard remains significant.

Lost Service Neutral (similar, but potentially more severe)

The consequences of a lost service neutral are similar, but often worse because the current flowing back through the grounding system is the entire load on the service (not just the load on the subpanel). The voltage imbalances can be more extreme, and the shock hazard is amplified.

Why 3-Wire Subpanels are Now Prohibited (with bonded neutrals/grounds)

The key is separation of neutral and ground. The NEC (National Electrical Code) and most electrical codes now require a 4-wire feeder (or 5 if you have more than 2 hots) to subpanels, with separate, isolated neutral and equipment grounding conductors. The neutral-ground bond is only permitted at the service entrance (first point of disconnect). Dedicated Grounding Conductor

With a dedicated equipment grounding conductor, fault current (e.g., a short circuit in an appliance) has a dedicated low-impedance path back to the source. This facilitates the operation of the overcurrent protection device (breaker or fuse) to quickly clear the fault. It also minimizes the voltage potential on the metal parts during a fault.

No Normal Neutral Current on Grounding System

The grounding system is only for fault conditions, not for carrying normal neutral current. Therefore, even if the neutral is lost, the metal parts will not become energized in normal operation.*

Safety

This system is inherently safer because it prevents the grounding system from becoming a current-carrying conductor under normal operating conditions.

In summary, the danger of a 3-wire subpanel lies in the potential for the equipment grounding system to become a primary current-carrying conductor if the neutral connection is lost. This creates a significant shock hazard because any grounded metal parts can become energized. The 4-wire (or 5) system solves this by keeping the grounding system separate and dedicated to fault current, ensuring that it doesn't carry neutral current under normal conditions. Flag for review