We find that the arc flash hazard in an outdoor substation is typically above the 8 cal level. Utility operating personnel are operating outdoor breakers at the breaker. They are typically 3'+ from an energized conductors but they are standing next to the enclosure containing the vacuum interrupter (13 kV).

Do this mean that they must wear additional clothing the operate the breaker if it's HOT?

Either that or operate the breaker outside the AFB using remote operators.

If it is utility equipment then it is covered by the NESC and not the NEC or 70E. Completely different rules apply. No AFB exists!