The noise and vibration level in modular‐type permanent magnet synchronous machines with fractional slot concentrated windings (FSCW) is considered to be an important design consideration, particularly for applications requiring fault tolerance. In this work, an interior permanent magnet synchronous machine (IPMSM) with FSCW is designed in a modular manner by dividing its stator windings into different arrangements having independent three‐phase sub‐modules with separate neutral points. First, the modular concentrated winding arrangement is studied to investigate the radial forces, vibration, and the associated noise level in the prototype machine having three‐phase sub‐modules under open‐circuit fault conditions. Then, another type of distributed three‐phase sub‐module winding arrangement is analysed to further investigate the vibration and noise level in the same prototype machine under the same operating conditions. A detailed two‐dimensional (2D) fast Fourier transform analysis is performed to investigate and compare the machine radial forces, induced harmonics, and sub‐harmonics for the two analysed winding arrangements. Considering the advantages and disadvantages of both the winding arrangements, the third type of mixed concentrated and distributed three‐phase sub‐modules winding arrangement is introduced in this work, combining the first two winding design approaches. A comprehensive harmonic (3D) structure, along with the vibration and noise analysis, is performed using a multi‐physics model analysis for all the winding arrangements under different three‐phase sub‐modules open‐circuit fault conditions. Lastly, the vibration levels of all the machine prototype models under different winding arrangements are experimentally validated. Moreover, the different modular types of winding arrangements are deeply investigated in this work to suggest the best winding arrangement approach that enables the machine to work in a wide range of applications requiring lower power levels or under critical, faulty, and hostile conditions. The proposed winding arrangement has reduced stator deformation with a reduced vibration and noise level under three‐phase sub‐modules open‐circuit fault‐tolerant conditions that can be used according to process requirements. [ABSTRACT FROM AUTHOR]