Take a case where a genset intended for islanded operation also has to to operate in parallel with a utility system.
The utility neutral is solidly earthed at the distribution transformer as is normal practice (in the UK at least). The generator neutral is not connected to ground at the genset because when the genset is paralleled to the utility the the neutral would be grounded in two locations and therefore cause neutral current to flow in the parallel path through the earth. This can cause problems with differential protection schemes which will trip when a certain current is flowing through the earth instead of the neutral.
A similar situation can exist when a generator is one of a number of sets on a common busbar. In this case there will normally also be a single connection from the neutral bar to earth to prevent earth currents.
If the neutral is not grounded for the reasons described above and the genset is also required to operate in an islanded mode during utility outage, then a means of earthing the neutral during islanded operation is required. This is the function of the neutral-ground contactor. It should be open when in parallel with the utility, and closed when islanded.
I'd personally choose a normally closed bar & shaft contactor for this duty because these contactors are usually very robustly constructed and because it will fail 'safe' and ground the neutral. As noted above, in the process of failing it would introduce a code violation by introducing an additional ground, but to my mind that is a lesser risk than leaving the system ungrounded which would render the entire EEBADS design philosophy useless.
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