Rapid grid integration of inverter-interfaced distributed generators (DGs) and low-voltage ride-through capability of the smart inverter, as per IEEE 1547 standard, has made unintentional islanding detection (UID) cumbersome. Also, the feeder reconfiguration capability in meshed microgrids with multiple DGs has made the existing UID techniques ineffective. The methods have limitations in UID for small power mismatch conditions characterizing nondetection zone (NDZ). In hybrid methods for UID, a disturbance injection is continuous or for an extended period, which degrades the power quality (PQ) and creates stability issues. Hence, a decentralized closed-loop hybrid islanding detection method (HIDM) based on the indices extracted from the subcycle phaselet (passive) technique with limited-time (only for two cycles) <inline-formula xmlns:mml="http://www.w3.org/1998/Math/MathML" xmlns:xlink="http://www.w3.org/1999/xlink"><tex-math notation="LaTeX">$q$</tex-math></inline-formula> -axis dc offset voltage injection (active) is proposed for UID of DGs. The proposed HIDM mitigates the NDZ due to the closed-loop scheme. Subcycle estimations from the phaselet technique result in quick UID and fault detection and classification process. Furthermore, the PQ issue is reduced due to the limited-time voltage injection (based only on the command from phaselet technique) in the proposed HIDM. Simulation results from the real-time digital simulator on a meshed microgrid and performance comparison with other existing methods prove the efficacy of the proposed HIDM.