I guess the question is then in what terms is that connection at the lug (and that condition) best described?
Why, lol???
The question of the day. Hopefully, someone responds.
IMHO it is an illegal tap.
IMHO it gets its power from the conductors not the breaker.
How can it be illegal when you can’t cite code?
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Service entrance conductors tap?
What a shit show these electrical questions turn into.
Breakers not rated for multiple wires. Call it simple as that.
Taps are done usually with a insulated or wrapped lug BEFORE (upstream or line side) the wire is terminated.
If its an SPD google the specific installation instructions and be done with it.
It’s going to be all right, I promise 
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@jfrederick Joshua, You ask why I would tell the seller. Here’s why:
This is an illegal tap. There are proper ways to tap into the main wiring using an approved connector. Solar panel companies use them all the time.
Being this was not done right, who knows whatever was done wrong. Is the wire size correct? If this is leading to wiring that is also incorrect what do you think would happen if there were a short? This wiring is on the “line side” of the breaker. This breaker will not trip, instead the power from the utility company will stay on and eventually start to burn, possible burning down the house and possibly harm to occupants.
Now you inspected this house, wrote your report. You told the potential buyers to have a licensed electrician look at it. The buyers don’t get the house for whatever reason and this is never addressed. This is why I would tell the sellers in this case. You can dispute this all you want.
I am a retired electrician, 35 years with NYC Transit and I.B.E.W Local 3 NYC.
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“Additional conductors were connected to the service entrance conductors on the line side of the main disconnect at the main lugs. The main lugs were not identified as being designed for the connection of more than one conductor. Appliances and devices on the circuit fed by these additional conductors may not be protected by an over-current device and represent a potential shock, electrocution or fire hazard. The Inspector recommends that an evaluation and any necessary corrections be performed by a qualified electrical contractor.”
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“Feeders for a sub-panel were connected to the service entrance conductor lugs on the line side of the main disconnect. The lugs were not listed as being designed for insertion of multiple conductors. The Inspector recommends correction by a qualified electrical contractor.”
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“In the service panel, two conductors were installed in a main lug designed for only one. This condition is improper. The inspector recommends correction by a qualified electrical contractor.”
1, 2, or 3?
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Peter do you think that the HI should tell the sellers agent instead? That way they would tell the seller and have to disclose to all potential buyers?
Thoughts.
What you proposed is just fine, Peter. 
There is no guaranty that anyone would have to disclose to all potential buyers, on a say so!
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Thank you Larry
My pleasure! 
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- It isn’t right and needs to be fixed or someone could be hurt.
True.
Hard to prove that a true hazard exists.
Do I like it? Hell no. Just call it out.
The fewer recommendations or opinions, the less you will have to defend!
No it is not hard to prove a hazard exists.
Jim I am sure you can define a hazard.
This is Ohio’s def:
SERIOUS HAZARD. A hazard of considerable consequence to safety or health through the design, location, construction, or equipment of a building, or the condition thereof, which hazard has been established through experience to be of certain or probable consequence, or which can be determined to be, or which is obviously such a hazard.
Ohio doesn’t consider fire a hazard?
Furnaces have fires!
Ohio has thought these definitions out. Both to protect the public and to keep inspectors from saying “that’s a hazard”. We don’t just willy nilly call something a hazard. We have to be able to defend the call.