Transfer Switch Grounding

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I have Generac Homelink Upgradeable Manual Transfer Switch (Model: G0068521 Serial: 3009887938).

The neutral is switch and I believe when this happens it is a separately derived system.

The manual recommended the generator attached to the transfer switch needs to have its neutral bond to the generator frame and the generator needs to be attached to a grounding rod.

My question is why does a grounding rod need to be attached to the generator when the house the transfer switch is on is already grounded, i.e., what risk is exposed?

Thank you

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