I too have had the same thoughts about protecting alternator output wiring..
My conclusions a

1) Alternator output wiring should go directly from the alternator to the
battery. This wiring should be protected with a fuse or circuit breaker
within 7" of the battery by a fuse or circuit breaker sized according to the
wiring's current capacity (wire gauge). This provides protection from a
short causing the battery to discharge at a very high current. Also there
should be a switch to completely disconnect the battery from all
connections. This allows the battery to be disconnected in case of fire
caused by current less than the fuse or circuit breaker rating. This switch
is normally left on, allowing the battery to be charged. The handle for
this switch should be readily accessible from the outside of the compartment
containing the battery.

2) Even if a short causes the fuse or circuit breaker at the battery end to
blow or trip, the alternator can continue to provide current to the short.
The alternator output wiring should be sized to safely carry maximum
alternator output. Since the alternator output current is limited to the
maximum amount the alernator can produce, overcurrent protection (fuse or
circuit breaker) at the alternator end of the wiring doesn't work. Instead
the wiring to the battery should be physically protected against damage such
as running it in conduit.

3) The above all protect alternator output wiring from overheating and
causing a fire due to a short or other overcurrent. However disconnecting
an alternator from the battery can cause high voltage at the alternator
output causing failure of the alternator's diodes. A Zap-Stop or similiar
device connected to the alternator's output can shunt the high voltage to
ground, protecting the diodes.