How Does Differential Protection Respond to Faults Outside Its Protected Zone?
Differential protection schemes are intended to be extremely selective, which means they will respond largely to faults within their protected zone rather than faults happening outside of that zone.
They accomplish this through comparing electrical quantities (often currents) entering and exiting the protected area.
If a fault occurs inside the zone, the analysis will detect a fault causing the relay to trip. However, if the fault is external to the zone, the currents entering & leaving must be the same, allowing the relay to remain stable.