That is so not true. Saying the inspector trumps the law is like saying a police officer can give you a ticket for going slower than the speed limit just because he wants to.
The builing inspector interprets the code (as adopted by the local jurisdiction) but he CANNOT make up his own rules - he cannot trump the IBC or the NEC or what ever code is in force. Building codes are laws and so must be followed by the citizen and the inspector.
Every jurisdiction also has some kind of appeals process if you don't think the inspector is interperetting the code correctly.
Appealing a ruling by the inspector sounds like a nightmare - yes, you could do it, but it would probably be cheaper and quicker just to do what he says.
I could see if you had plenty of time, that the appeals process would be a consideration.
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