Surely this is more fundamental: a control problem? Why does the motor have to shut off suddenly? Why would you even want it to? (This situation being a prime example of why you wouldn't!)
Among passive solutions, it might be reasonable to inductively ballast the generator, by using a saturable reactor into an LC resonant tank. With the right choice of values, it can be made to resonate just below line frequency, at nominal voltage; and therefore will draw little current. Then, when voltage swells, the inductance drops, pushing resonance up to line frequency, sucking extra amps from the generator. (Unless the resonant circuit has a heavy load, and even heavier construction, the current draw will be largely reactive. I don't know the behavior of diesel generators, to be able to tell if this would help or not. Or if the line frequency is even stable enough for this to work.)
Or if such a network is used as a pass element, then you have a ferroresonant transformer, which tends to regulate the output voltage (albeit proportional to line frequency). These are extremely bulky and hot, for this kind of power level... but just saying, there may be a passive solution.
As for active solutions, I agree, you don't want to use an IGBT here, not with such a simple circuit anyway. And it wouldn't work to use just one, with hysteresis (so it's only on or off), because you're just trading one load step for another: it can't just stay on, it has to turn off eventually! It may end up working anyway (hysteretic control will result in PWM operation), or it may make things worse (pulsating load upsetting the generator, regulator or governor?).
If the controller will deliver full power at a lower voltage, I'd suggest simply turning down the whole thing. Adjust the generator regulator, or add a transformer.
Tim