What happens if there was a short circuit fault BEFORE the main circuit breaker?
You can't stop the fault but you can limit the damage. 

The distribution transformer will have fuses on the primary (high voltage side) and secondary (low voltage side) to prevent the wires running to your house from vaporizing and to prevent damage to the transformer and disruption to the grid. 

Everywhere through the distribution system there will be similar protective devices, they just have to handle more kVA the further you get up in the food chain.