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.

Getting a bit off subject but i reminds me im using an ordinary yamaha trail two wire rectifier on my 12 volt honda TRX300 quad because i'm too tight to spend money lol. Regulator rectifier melted & went up in smoke with black stuff dripping out the back. Thought why is there smoke from under the rear guard & put my hand under there which wasn't a good plan. Pulled the wires & rode home. Anyhoo, got an old rectifier & experimented with alternator output to find the lowest output & fed it through the rectifier then to the battery. Been like it for years now. Just charges enough to keep on top of 12 volts plus a bit. I don't use the lights or vary rarely just to get home from down the road. Had to have one alternator wire earthed by memory to get voltage out of the others to test. I'd better take MarkT's advice & fit a fuse in the line between rectifier & battery incase of failure or i guess the alternator becomes a big resistance until more smoke appears.