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This generator seems to be not working currently. Or This generator seems not to be working currently.

Does it possibly mean that, I started few hours ago and after running 1 hour it stopped working is it right it's just a scenario.

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This generator seems not to be working

to me, doesn't sound incorrect but is too informal, while

This generator seems to be not working

sounds very clumsy; although I wouldn't be too sure it's ultimately incorrect grammatically.

This generator doesn't seem to be working

would be neutral in style, safest choice.

See Google Ngram Viewer

  • The seems not to be working variant sounds more archaic than informal to me. – Lawrence Dec 22 '17 at 15:09

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