Aiming at the fault overcurrent problem existing in the current arrangement scheme of the bridge arm reactor in the modular multilevel converter (MMC) of the bipolar flexible DC transmission system, the influence of the bridge arm reactor in different positions on the converter fault current is analyzed in this paper, and the mathematical expression of fault current component is derived. A scheme of placing the bridge arm reactor near the DC connection point is proposed. The study shows that the arrangement of bridge arm reactor near the DC connection point can effectively limit the rise rate of fault current, reducing the overcurrent level of the bridge arm module without increasing larger costs. However, when the bridge arm reactor is arranged close to the DC connection point, the short circuit fault of the bridge arm reactor wall bushing cannot be detected in time by the existing protection strategy, which brings potential threats to the MMC. A protection strategy, which can effectively identify the short circuit fault of the bridge arm reactor wall bushing is proposed in this paper. Finally, the correlation analysis and protection strategy are verified by PSCAD/EMTDC simulation.