The fuse protecting the capacitor is chosen such that its continuous current capability is equal to or greater than 135% of rated capacitor current for grounded-wye connected racks, and 125% for ungrounded-wye racks. This overrating includes the effects of overvoltage, capacitor tolerance, and harmonics.
Most capacitor fuses have a maximum power frequency fault current that they can interrupt. These currents may be different for inductive and capacitively limited faults. For ungrounded or multi-series group banks, the faults are capacitive limited.
The 10uF cap can be near the regulator where it does the most good. The inrush current with that size of capacitor should be no problem for a 3.5A fuse. The fuse you have selected is a fast acting fuse but the thermal mass of the fuse will unlikely respond in the short time that it takes to charge a 10uF capacitor.
Putting a capacitor at the IN (Voltage in) pin of the voltage regulator (LM1085) is recommended by LTC. According to me, if I put my cap after the fuse, it will act like a short when I connect my 12V PC supply to my board. The inrush current could kill my fuse every-time I connect PC-supply.
Capacitor current-limiting fuses can be designed to operate in two different ways. The COL fuse uses ribbons with a non-uniform cross section. This configuration allows the fuse to be used to interrupt inductively limited faults. The pressure is generated by the arc contained in the sealed housing.
This fuse is used for capacitor banks with a large number of parallel capacitors. It can be used on applications with essentially infinite parallel stored energy, as long as sufficient back voltage can be developed to force the current to extinguish.