If I had of measured and laid-out the pieces of 5/16” Rod more accurately I would have cut the pieces shorter. As it turns out, several of my colleagues saw the rod extensions and are making theirs the same way.Yup, the bolt tension force is common to both our systems, no argument there. What I'm trying to say is the barrel nut is resolving the force on a tangent line between the barrel OD & block hole ID. the barrel nut also allows a bit of free play of the smaller diameter bolt within the holes until the bolt is tightened & the stud 'straightens out'. Your top washer is acting a bit like a self-alignment devise to make the stud orient more perpendicular as its tightened, which is a good thing.
My attempt at keeping the fasteners entirely hidden, unfortunately uses 2 barrel nut equivalents. Now we have 2 wiggly's not just one where all that force is resolved to 2 teeny contact tangent lines. And the drilled hole condition is not all that great. Anyways, I wanted to see if I could mimic a Renzetti style where block assemblies can one another in a multitude of flush orientations. In real life my attempt was fiddly & basically a fail IMO. Despite having lots of clamping force.
Real or conventional 123 blocks have a proper clearance hole sized relative to the threaded hole. The clone blocks failed to understand that detail apparently because you cant pass the stud through the open hole. I think they banged them all out with a tap drill & threaded every odd one. Anyways, the tapped hole more or less confines the stud to self-stand straight so its already perpendicular to the other block. There is no (or nil) initial axial freedom of the stud. The matching close fitting clearance hole serves to limit movement in the displacement direction. Conventional blocks still use 'proud' fasteners so there is difference in that respect. Hope this helps explain.
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The rod extensions help to serve as guides in their mill table ‘T’ grooves and other guys like the way they can use them in Jig Plates as locators.
Give them a new feature and they will make use if it !!
LOL