This is the incorrect interpretation. The tongue weight is for force applied by a trailer with its own wheels causing the tongue force to press vertically down on the ball. A bike rack or other accessory will produce a torque, rotating around the hitch attachment point under the vehicle instead of a vertical force. The accessory weight limit is rated based on this difference.After further review, I believe MY max tongue weight is 350lbs. The 120lbs is referring the hitch rack weight limit Tesla offers as an accessory. So, you can’t hang more than 120lbs on Tesla’s bike rack, but if you buy other bike racks or platforms ans don’t exceed 350lbs, I’m confident it will be fine. Going to keep the hitch option after all.
It would be nice of Tesla gave a torque rating, and distance from torque point to hitch pin so that advanced users could calculate the accessory weight that can be supported at various distances from the hitch pin, but they don't. All we know is that they calculated that 160lbs is safe for some reasonable length of accessory.