The fracture of polymer networks is one of their most important properties governing both their toughness and their ultimate extension, which are critical characteristics for most applications. Macroscopic fracture behavior of networks is dependent on crack formation and propagation on the molecular level, the direct quantification of which remains elusive due to the complex intercorrelation between the molecular-level topology and chain scission mechanisms. While state-of-the-art methods for highly coarse-grained network fracture simulations have been successful at predicting trends in macroscopic properties, they are usually limited by certain key assumptions of periodic boundary conditions along non-tensile axes and purely attractive interactions within network elements. These assumptions impose restrictions on the network structure and dynamics, preventing accurate analysis of crack propagation on the molecular level. In this work, we develop a coarse-grained approach for modeling repulsive excluded volume (EV) interactions in network fracture simulations, to study crack formation processes on the molecular level. This formalism eliminates the need for periodicity constraints along the non-tensile axes. Simulations reveal that consideration of EV interactions leads to physically consistent and more realistic fracture behavior. Such networks exhibit excellent quantitative agreement of linear elastic modulus with experimental results in contrast to networks without EV, and a necking regime during fracture, consistent with the behavior of real networks under pure tensile deformation. While network toughness with EV is quantitatively similar to that obtained without EV, the molecular-level chain scission mechanisms are significantly different - both qualitatively and quantitively. EV interactions lead to stress homogenization, whereas stress concentration is observed without EV, leading to unphysically rapid fracture of such networks under low strains. Overall, this method provides a coarse-grained approach of incorporating excluded volume interactions in polymer network simulations, allowing accurate analysis of crack formation and propagation, and paving a way for study of molecular-level crack nucleation in network materials.