Fuses are for safety and to protect equipment. In reality, they are to protect the power wire to your equipment. If there is an over current situation, it is better for the fuse to blow than to have the wire overheat and start a fire. So the protection of your controller and lights is secondary. I have to whole heartily agree to fusing AC lights. AC power is dangerous and scares me. That’s why I prefer to stick with DC power with LED lights.
If you design your lights with distributed power, you will only need fusing on the input AC line. For example, using a 3/5 ampere power supply per string. The power supply will protect the lights and the controller with the built in short current protection at 3 or 5 amperes. So even if you placed a fuse in line with the power to the LED’s it would never fail. Because fuses can take up to 100 hours to blow at 110 percent of the rating. For them to go instantly, they have to see almost double their current rating. Since the power supplies provide short circuit protection at their maximum output power, the fuses may never never see enough current to blow.
For example, look at your PC power supply. A typical power supply has 20/30 amperes at 12Vdc, and 20/30 amperes at 5 Vdc and 3.3Vdc. There is no fuses on the output of any of the power lines. The power lines all directly connected to internal components. However, there is a fuse in the power supply. It is on the AC line into the power supply. Which protects the power wire to the computer.
Sizing fuses can be difficult. There are many factors that affect the value. For example if it is used for motors, which have a high in rush current, the value is about double the nominal current. Also, as temperatures increases, the fuse current rating should be increased. However, most of the loads for LED lighting don’t have high in rush current, so setting the fuse at 0.75 to 0.80 of its rated value is a good rule of thumb.
There is one exception to using fuses in line with LED’s. If you use a high current supply to run all of your strings, it is appropriate to fuse them. High current can be anything from 10 to 20 amperes, but this is left to the user to decide. Also, note that these power supplies should only be used with 12V strings. If you use them with 5V strings, your voltage drop in the wire will result in the strings being used at too low of a voltage.