Humm.... I'm prolly missing something, But if Q1 turns on/shorts, dumping the gate charge, wouldn't the sense resistor have less than trip current right away? Then wouldn't it also turn Q1 back on right away, thus causing the system to oscillate?
(It's *WAY* past my bed time, been up all night here.)
Edit:
My (meager) simulations show that it doesn't actually oscillate like I though at first, but rather it simply holds at constant current (IE basic current limiting). C3 never discharges, The inverters never get tripped, the alarm never goes off, M1 never gets turned off. So those sections of the circuit appear useless currently. Also note I can't do inverters that are Schmitt triggered or that are 12V capable, as well as Schottky diodes at all with the falstad simulator. So I had to play things by ear a bit.