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Inverter-based resources (IBRs) exhibit distinct short-circuit characteristics that challenge traditional protective relays designed for systems dominated by synchronous generators. While research often focuses on IBRs’ positive-sequence currents during faults, their zero- and negative-sequence responses under unsymmetrical faults remain underexplored. Factors such as transformer configurations and grounding methods further complicate the design of protection schemes relying on these sequence components. This paper enhances the understanding of IBR short-circuit behavior during both symmetrical and unsymmetrical faults and investigates the impact of various transformer configurations on these behaviors. We highlight the limitations of traditional protective relays in safeguarding IBRs due to their constrained fault current levels, minimal negative-sequence components, and, in many cases, the absence of zero-sequence currents. To address these challenges, a novel incremental focused directional protection scheme is introduced. This approach offers enhanced fault detection capabilities under the complex conditions posed by high renewable energy penetration and diverse transformer configurations. The proposed method provides a robust solution for ensuring reliable protection in modern power systems with high integration of IBRs, contributing to improved grid stability and resilience.