Cascade multicell (CM) converters are characterized by their high modularity, allowing their power to be easily increased. This also allows any faulty module (cell) to be isolated, so the load can be fed by the remaining operative cells. This leads to operation with an unbalanced number of cells. The use of modified voltage references to avoid the unbalanced operation in steady state has been proposed in the literature (denoted as fundamental phase-shifted compensation). This paper presents the transient operation from normal to faulty operation when such voltages are used and an induction motor is driven by the converter. In the first place, a simple way to include fundamental phase-shifted compensation (FPSC) in closed-loop operation, specifically with a field-oriented control (FOC) scheme, is presented. Then, the use of two supervisor controllers is proposed to modify the FOC speed and flux references. These new references avoid hard torque pulsation while automatically determining the maximum power available from the converter and applying it to the load. Experimental results obtained with the proposed technique in a low-power CM converter are shown for two different cases, constant torque load and fan curve load, showing a significant improvement on the signal behavior.