Let me chime in.
If I understand the snip you gave from the manual, when I am using the inverter I should have the chassis ground connected to earth ground.
Yes - in exactly ONE place.
When I am using a generator to charge batteries and run loads, the chassis ground should be disconnected and the generator connected to earth ground. Is this correct? It seems odd, I must be misunderstanding.
Yes you are misunderstanding. The issue relates to how the outside source is connected internally, not to whether it's outside.
That statement refers to plugging into a GRID system - where the neutral-ground bond is already made somewhere out there - probably at the meter drop / main breaker box. Connecting the two at the inverter also means you bond in TWO places. This is a no-no for several reasons, among them:
- It splits the load current between the ground and neutral wiring. This causes the voltage drop in the ground wire (and possible connector corrosion) to raise all the grounds in the affected system (such as the cases of electrical equipment, doorknobs, handrails, plumbing, stairway, hitch handle, ...) to dangerous voltages above other local grounds (such as the next trailer over, the ground water, the water pipe, ...). Electrocution hazard. Corrosion hazard. ...
- If lightning hits nearby the double-bond encourages the bolt to travel through the wiring to get from one bond to the other, greatly increasing the amount of damage and fire risk.
If you're plugging into an external generator you need to check THAT GENERATOR to see whether IT has a ground-neutral bond. If it doesn't, you leave the one in the inverter connected. If it does you disconnect the bond in the inverter - or the one in the generator, your option. And you also make sure there is ONE connection from the system ground to a ground rod/water pipe/whatever is appropriate.