No your abosoutely right most of the heat does go out the exhuast. We're kinda working with percentages here which are constant. Say 90% of the heat goes out the exhaust that leaves 10% to be obsorbed by the cylinder, piston and head. This is why we have coolant in the first place, these areas get HOT. So say you have 5ci of space on the piston and 10 on the wall and another 5 in the head. Thats 20ci of material to displace the remaining 10% of the heat. NOW, you take that down to 15ci or less and leave the same 10% of heat in the cylinder. Its got to go somewhere. Remember from before that materials only displace a certain amount of heat for a given time period. Now suppose your cylinder wall is 500deg (just for a number) when it had that 20ci of space helping. Take that down to 15ci of space with the same 10% of heat and your wall temperature mathmatically should increase. Think about a small flame in a huge sealed box. No matter how long you hold that flame the box walls might only hit 150 deg. But you put that same flame in a smaller box and those walls might hit 300+. Does it make sense? Now I'm sure there'* something to explain this because like I said people have been doing it for years and I understand nascar uses it. But its just something I was thinking about
Stuff got done.