Haha, thanks Mike for your concise answer. My understanding of the analysis of a preloaded bolt is that it is a assumed to have an initial, lower bound stress of the preload stress, and any additional stress that the bolt "sees" up to its preload stress does not add to the bolt stress. However, once the preload stress is exceeded, the analysis stress is now the stress seen by the bolt.
I know this is a simplification, and that other ways of analyzing preloaded bolts are out there. So when I heard the idea that I explained in my original post, I thought it might just be a different way of looking at things. I probably misunderstood though.