How high voltage regulation transformer can be used to reduce fault currents in a circuit?

it can prevent the zero sequence current

Let me clear on thing that as per my understanging, question is not narrated properly. Infect its not transformer that helps in limiting the fault current. As transformer is always there and contributes a specific percent impedence in the system. However high voltage transformer those are equipped with onload tap changer (voltage regulation) has an edge in limiting the fault current. As this onload tap controbute additional impedence that can either be resistive or reactive and hence limit the fault current. So infect question should be that, How can an onload tap changer helps in limiting the faulty current in an HV Transformer. Regards

High impedance transformer can reduce fault currents, or inserting current limiting reactor in secondary side of transformer can reduce fault currents depending on criteria of acceptable levels of short circuit and voltage regulation for a given application

The fault current in a system will be limited by the impedance in the system. When you include transformer in the circuit, its reactance will reduce the fault current.