It is because that this particular protection scheme/relay would operate only (and only) if the earth fault happens within a pre-defined zone. If the earth fault happens out side this pre-defined zone, this relay would not respond, even if the fault current is beyond the setting made in this relay. For such "external" faults, other "non-restricted" or conventional earth fault relays would operate.
As the operation of this relay depends upon the fault occuring within a "restricted" zone, the adjective "restricted" is used.
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