You can calculate the 'instantaneous' power dissipation in the die by using I
MAX2 * RDSon. You can size the current limiting resistor accordingly to limit I
MAX if it causes excessive power dissipation in the die.
There will be some thermal inertia, so dissipating 100W in the die will not heat it up
instantaneously. But, as near as damn it - it will only take a few microseconds to respond to changes in power dissipation. There are usually thermal models in the datasheet for some devices that treat the thermal properties of the die as a network of resistors and caps. The network always forms a low pass filter.
For very short term overload (< 1ms), where the heat generated by the die does not even have time to get through the package, you need to absolutely ensure that the peak/instantaneous/maximum/worst-case power dissipation (whatever you want to call it) is within the safe operating area curve of the fet. Heatsink size doesn't come into it. For longer duration overloads (> a few ms), you still need to ensure the power dissipation is within the SOA curve, but you also need to ensure the die does not exceed its maximum temperature. Heatsink size and thermal resistances and all that are now very important.
My experience with semiconductors is that they invariably, wilfully and honourably sacrifice themselves, laying down their lives to protect the fuses - polyswitch or otherwise. I do design using polyswitches, but I only treat them as a secondary layer of protection to prevent catastrophe/fire/death if the mosfet fails short. For primary overcurrent protection, I use either a high-side current sense circuit to 'instantaneously' cut the fet off under overcurrent conditions, or, better still, use a high side smart switch like the
VN920 which has a diagnostic output proportional to the load current and is fully protected, but is only good for 1-2 KHz PWM. (VNB35N07 works on the low side and is much faster).