The shock is going actually IN the extended ISC tophat, thus not slamming into the bumpstop/cut bumpstop/FCM bumpstop/bottom-of-the-tophat-'cause-I-got-no-bumpstop.If it bolts down to the same spot on the shock body, how does it allow the shock to go higher? All I see it doing is compressing the springs, but keeping the same mounting point. What am I missing here
That way you gain suspension travel.
Imagine the shock GOING IN the ISC tophat (giving more travel):
Imagine the shock GOING IN the OEM tophat (no travel to be gain, no extension):

You notice that the OEM tophats are nearly flat, and the ISC are extended, giving more room for the shock to move up.