They connect an approx 10 ohm load across the supply for short durration, when this happens the voltage will sag a little (think of your lights when you switch on the instantious electric shower), if this is measured along with the current that flows, then impedance of the supply can be given by delta V over I (ohms law).
If you want the fault current, then just break out ohms law again with the supply voltage and the newly discovered impedance.
Its not a perfect method and you perhaps shouldn't rely on it to 3 dp or anything like that, but rather a rough indication of the impedace (which should be noted is not a perfect constant)... if you are using the 75% rule you shouldn't go too far wrong
Methods for getting the loop reading between Phase and Earth when an RCD is fitted is usually either to try and saturate the RCD coil with DC to lock it (d-lok on old robin testers) or a 15ma test current (which reduces accurracy, but generally if you have an RCD then things arn't quite so critical anyway)
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