Attempting to go from 6 to 12 volt system on a 72 DT2 250. Wiring in the 12v rectifier/regulator I am confused as to why the original 6v rectifier output is on the fused side of the system. Seems to me it should be connected directly to the + of the battery and isolated from the electrical system in the event of a short in the system causing a blown fuse.

Best practice would be multiple fuses, one at the battery and others at stator outputs.  But you certainly don't want to connect the battery directly to anything (including a rectifier) without fuse protection.  

I'm not sure what you're planning, but I'm guessing it's pretty much a "re-engineering" of the stock system that carefully balanced stator output against loads to limit the voltage.  

Original battery charge current through the rectifier is pretty weak and the original rectifier is not very robust so the way Yamaha wired the bike works fine and is safe.  If you're changing the design, it might be prudent to add fuses.