Block off plates and o2 sensor

Is the fuel map already corrected for the extra amount of fresh air that is pumped into the exhaust track? Isn't the o2 sensor getting a false reading just like you would on a dyno if the AIS isn't blocked off? What happens when you install the block off plates? Will the o2 sensor now get an accurate reading?

I know it's a lot of questions, but I was just trying to best describe what's going through my head. :screwy

Thanks!