Strict interpretation of NFPA70E would indicate that troubleshooting 120vac circuits with the power on would be classified as HRC1. PPE for HRC1 requires long sleeve shirt, long pants (both FRC rated at 4 cal. or FRC 4 cal. coveralls over non-melting clothing), Arc-rated face shield (4 cal.), safety glasses, hearing protection, hard hat, rubber gloves with leather protectors, and leather work shoes.
Is this interpretation correct ?
Can a 20a 120vac circuit sustain or even produce an arc flash?

Yes AND no, strict interpretation of the 70E would not allow you to do this work energized unless you meet some very specific criteria and then do a risk analysis, complete an EEWP, and wear the proper PPE, which is most likely HRC1 (Assuming you meet the criteria in the notes section of the tables)

The exception to this is voltage testing (I know you said T/S but the title of your thread says "servicing") and troubleshooting, which allows you to do it with the PPE from the tables.

Zog, Thanks for the reply and sorry for the conflicting terms. I was in fact inquiring about troubleshooting (voltage testing), which as I understand the regulations is allowable without an EEWP. I guess I have an issue with a 120vac circuit fed from a circuit breaker protected sub-panel, an additional 20amp branch circuit breaker, fed with 12 gauge wire being capable of sustaining an arc flash. While I undestand the regulation is also aimed at shock protection I'm not sure the regulation was really aimed at low voltage applications.

You are most likely right about that not being self sustaining, and someday I expect to see some changes in the standard. Did you read the "scope" article? (110 I think, don't have my copy here) There are some cases where the 70E may not apply.