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The performance of low-voltage circuit breaker overload protection degrades slowly during service, and the service state cannot be simply described as a normal state or a fault state. To address this problem, a method is proposed to classify the operating state of low-voltage circuit breaker overload protection, taking into account the safety margin of action characteristics and a Markov-process-based operating state transfer model is established to accurately describe its actual service state. By analyzing the degradation of the overload protection performance of circuit breakers and simulating the state transfer with different operating conditions using circuit breaker reliability levels and operating time as the main variables, the change law of the service state with service time is determined. The method is not only applicable to the analysis and evaluation of circuit breakers with different reliability levels but also has guiding significance for improving the safe operation of distribution grid systems.