This is getting wierd.
Normally a xfrmr will not be far from the supply so the wire will be what is needed for the rating of it. The wiring to devices after the xfrmr may need to be sized according to distance...that depends.
In general there is no difference between step-up or step-down, as long as the xfrmr is rated to match the load, within specifications.
The 1HP per Kva is not a hard set rule, you can fudge it a little but IMO, it is not something you want to do.
In this situation you stated the machines are 20-25HP; therefore the vendor may have thought it more practical to use one specific xfrmr, in this case it could have been up to 40KVa depending on the situation. Yes that may cost more BUT it may also eliminate issues with overcurrent AND having to stock multiple replacements.
There is always a reason, some good, some dumb, behind why someone does something. I would investigate the reasoning of the other vendor.