App note from Maxim Integrated about adding additional current limiting circuit for their MAX38902 LDO. Link here
Current limit in a LDO establishes an upper threshold for the current delivered. In a low dropout linear regulator architecture, the input and output average currents, which are connected by a series pass-through transistor, are almost the same.
Why current limit? Any surge in the current demanded by the load and/or triggered by a load fault condition results in an additional input current draw. If the device is not over current limited then this additional current can result in unacceptable system performance like increased load ripple, output voltage going out of regulation and, if not limited, can lead to system failure as well. Hence, there is a need to limit the current against these conditions in the interest of safeguarding the associated electronics within and outside the LDO so that it gracefully handles the fault condition (like output short circuit) and auto-recovers when the fault is removed.