All are used EXCEPT #1, #2, and #3. Arresters are not normally used from Phase To Phase (of course someone, somewhere might do this but it is NOT recommended).
For full protection, arresters are provided on each phase to ground and on each phase to neutral. (A neutral to ground arrester is also used and is commented on later at the very end of this explanation.)
Connecting arresters from phase to ground and phase to neutral allows for surges to be shunted to earth ground and to limit overvoltages seen by the load.
Phase to phase connections don't give the surge a place to go. Lightning strokes are seeking earth ground because the earth is the target of lightning. The subject of how lightning is formed is terrifically complex and under much study as well as debate. For this quiz, we are going to keep things simple and fundamental.
Lightning is formed when a build up of charge exists between clouds and earth. An electric field between earth and cloud is generated by the charge build up. When the strength of this electric field exceeds the dielectric strength (i.e. insulating ability) of the air between cloud and earth, the air breaks down electrically as an insulator, and the excess charge flows from cloud to earth in a static discharge much like a sparkplug operating.
Now please don't get bent out of shape over this simplified explanation, and YES lightning does strike both ways, from earth to clouds as well as from cloud to earth ground. The point that we are trying to make is that lightning is seeking the earth ground because earth is one of those sparkplug electrodes.
Now if a power line gets in the way of this strike, the charge can either be deposited directly onto the line and travel as an energy wave down the line seeking ground - or that which is more likely, the lightning just misses the power line but a wave of energy is magnetically induced into the power line by the lightning's current passing very near the line. This energy wave travels down the line seeking ground. The energy wave is a traveling voltage wave of high magnitude accompanied by an associated current wave. Normally we concern ourselves only with the voltage of the wave.
It is interesting to note that this wave travels at close to the speed of light, is about 1000 feet long physically, and only affects the portion of the power system that it is instantaneously occupying over its 1000 foot length!
Hopefully, an arrester on the utility line will intercept the traveling wave and will operate and shunt the surge safely to ground. However, surges can enter your industrial plant for numerous reasons and you must also protect your plant from these surges and not depend on the utility only.
MOV arresters are in reality non linear resistors that are high resistances when energized at low voltages but become short circuits when a high voltage is placed upon them. When an overvoltage wave reaches an arrester, the wave's voltage is impressed upon the arrester and causes it to go into short circuit conduction.
The impressed voltage can only build up to a certain value which is limited by the arrester (clamping voltage) because, the more the wave tries to impress its voltage, the more the arrester conducts and siphons off the energy (or electrons) to ground. The voltage can't build up more than a certain value because the short circuit current will keep increasing. It's kind of like the voltage wave is stepping into an electrical pit of quicksand. (OK the analogy has its limits!)
The overvoltage is drastically reduced in magnitude and the only thing left of the traveling wave is a traveling wave whose voltage has been clipped and reduced below the dielectric strength of the power system's insulation.
(Ensuring that the proper arrester has been selected so that its clamping voltage is lower than the system dielectric strength so that there is a "margin of protection" is called insulation coordination.)
This reduced voltage (and reduced energy) wave will harmlessly bounce around the system dividing up at junctions and reflecting in complex mathematical ways (well not so complicated once you see it) until its energy is dissipated through the power system's impedance. Because its voltage is lower than the insulating strength of the system equipment, nothing should flashover or puncture electrically.
You may be a bit surprised to see the #10 connection which shows the arrester connected between neutral and ground. Admittedly, this is the most expendable connection but it does provide protection due to any surges on the neutral. If you are at the service entrance, where the neutral and ground are bonded together, this arrester at this location need not be used. However, further down the line in the middle of your industrial plant, you will want to use this connection for full protection.
And don't forget - arresters don't just protect your equipment from lightning. They also protect the system from switching surges that can originate inside your facility whenever switches and breakers open and close.