I asked Eric how it worked...this is his answer
Hi Steve,
Once PE mode is active, input from the O2 sensor is disabled, and the INT (short term fuel trim) is forced to 128.
However, the BLM is not forced to 128 until around 200gr/sec (about 10psi boost). So if the O2 sensor was bad, which caused the last BLM cell to be jacked up (the 12th cell in that chip), that cell would still be used up to around 10psi.
After 200gr/sec, the BLM is forced to whatever value someone put into the WOT fuel param (#1), which would be 128 if no one changed it. The O2 sensor has no effect on anything at that point.