A fault-tolerant control (FTC) is proposed for enhancing the reliability of power electronic systems. The software-based FTC of parallel-connected three-level T-type converters (3LT2Cs) for suppressing zero-sequence circulating current (ZSCC) induced by a vertical switch open-circuit fault is investigated. A simplified sequential model predictive control (SSMPC)-based FTC technique is developed. Parallel-3LT2Cs and their prediction models are introduced, followed by an SSMPC for the no-fault condition. The model inaccuracies under vertical switch faults are elaborated. For the faulty 3LT2C, two fault-tolerant SSMPC (FT-SSMPC) methods are provided by creating a sequential predictive controller that considers ZSCC suppression and grid current tracking. The control policies for the ZSCC are changed from the standard feedback-free to feedback-based cost function (CF) optimization using the unimproved FT-SSMPC. Furthermore, an improved FT-SSMPC is proposed using a phase-deficient CF, which increases the accuracy of the mathematical relation of the fault condition. After fault diagnosis, the proposed method achieves neutral-point voltage balance and excellent point-of-common-coupling current, effectively suppresses the ZSCC, and increases the control reliability. Finally, experiments demonstrate the effectiveness of the proposed FT-SSMPC under various conditions.