It is over fused if a breaker larger than the manufacturer's label calls for is installed.
Here is a good explanation I picked up somewhere:
A/C condensers contain a hermetically sealed compressor motor as well as a fan to circulate air across the coils. The rules for protection to motor circuits are different than for circuits with simple resistive loads. When a motor first starts , it draws a much higher amount of current than it does after it is running. The high "inrush" current can exceed the rating of a breaker or fuse sized to protect the wire. The inrush current lasts typically only about 6 electrical cycles, or 1/10th of a second - less time than it would take to damage the wire or its insulation. However, if the overcurrent device is sized to protect the wire against overloads, the device might trip, and the machine would not be able to start.
Motor circuits get around this problem by dividing the two separate functions of an overcurrent protection device. "Overloads" are currents that can damage a circuit if allowed to continue for a sufficient time, whereas "short circuits" and "ground faults" are high currents that can cause immediate damage. Large motors and air conditioners separate these overcurrent functions. The breaker or fuse ahead of the air conditioner only protects against short circuits and ground faults. Overload protection is built into the compressor itself. The wire to a condensing unit must be large enough to allow the equipment to start. The device is therefore NOT sized to protect the wire against overloads. It is not uncommon to see a 50 Amp breaker on a #10 wire. The wire is protected against overloading by a separate thermal protection inside the compressor.
How do we know what the motor requires for wire size and proper fuse/breaker protection? It's all on the mfg. label attached to the appliance. If the label calls for fuses, there MUST be a fuse in the disconnecting means, not a circuit breaker. If the label calls for a "HACR" type breaker (Heating, Air Conditioning and Refrigeration), then that is the type of breaker that must be used. If the label simply states "maximum sized over current protection" then any form of overcurrent protection may be used. The HACR designation is not always visible on a circuit breaker once it is installed inside a panel or disconnect.
Note on the label taken from a Lennox A/C data plate:
MIN. CKT. AMPACITY - 17.7.
MAX. FUSE - 25 UL (CSA is a Canadian standard. We use UL in the U. S.)
MAX. HACR TYPE CKT. BKR. - 25 UL
MAX. CKT BKR. UL - Not allowed in U. S.
All this means is the MINIMUM wire size required is #12 (solid copper); the MAXIMUM rating of a fuse (if a fuse is used) must be 25 amps and the MAXIMUM rating of a circuit breaker (if used) must be 25 amps AND the breaker must be a HACR type.