If you are referring to the front then you could not be more wrong.
Set initial spring preload.
Set height using shock body.
Dial in pre load to change corner weights. (using scales.) This is the main benefit with this design - Adjusting corner weights without changing ride height.
Changing the preload on the front to adjust the height is terrible. to lower it you would have to have the spring loose. Then you are defeating the design and losing damper travel.
I agree and disagree with you. This principle of height adjustment can vary slightly from vehicle to vehicle. I do appreciate your input. Please take the time to read below and let me know if something seems astray to you but I really do not want to flood this thread with information that contradicts the way the manufacturer is recommending things are done. You're not adding that much preload. Nothing near the 8-10" that Tesla does from the factory. Because of the limited amount of room on the front shock it's difficult to have a main and helper spring stacked. The method mentioned above is how Bilstein, KW, H&R, Eibach, Penske, JRZ, and the likes to it. Why would companies as reputable as that pursue a manufacturing method that is more costly than using universal damper tubes and just machining application specific lower brackets? If you google images of these types of dampers you will likely not see an independent lower bracket. As for KW, on the Model 3 you will also see the lack of a helper spring so height is adjusting by displacing the spring itself, ergo preload. I also was under the same impression as you 20 years ago when I first started importing coilovers from Japan. This is back when our only choices were using Koni Yellows and Ground Control sleeve over kits so finding an integrated system was like the invention of TV to us.
Fortunately Redwood has already done all the hard setup work for the consumer because of the "additional" merits of the Ohlins design that you refer to. The thing is that if the consumer doesn't know what they're doing then they can negatively impact the overall clearances between sway bars and tie rods, battery clearance and the ground, or tire and the inner fender, etc..... The way a lot of other European dampers are set is such that you cannot change this position. There's a reason for that.
I digress and back to my point. If someone wanted to go through all the steps we did from scratch then this is what you would do.
1. Install the shock assembly without a spring or bump stop while leaving the car in the air.
2. Install the wheel and tire assembly onto the hub. Tighten it down.
3. Compress the suspension to a point where it bottoms out.
4. Inspect around the complete assembly to ensure there is no contact anywhere. This is where we are setting the "free length" or what I call the "critical shock length" because it is critical. If this length is too short then under full compression you will run the risk of unsettling the chassis or causing damage because other components of the vehicle will "bottom out" before the shock does.
5. Once that free length or critical shock length is set you can remove the suspension from the vehicle, install the spring with matching "preload", and put the whole assembly back in the car. Do this on all four corners.
6. Now you can tighten everything down, settle the car, and check for ride height.
7. Now you can document your current ride height, write it down, then determine your ideal ride height.
8. Then you'll have 2 #'s and of course you'll subtract the two #'s from each other to obtain your delta.
9. At this point it will be wise to know the motion ratios at the spring location so you can adjust height without going back and forth too many times. This will at least get you in the ballpark of your desired ride height. Fortunately they have done enough installs that there are a lot of baseline measurements that can be provided so the regular person won't need to go through all these hassles. Once again RW has done all that math for you and will be defined in their install guide.
10. Then it's an averaging between the adjusting the preload and displacing the actual shock bracket. In this case, for liability reasons, it's recommended to adjust preload only as Redwood wants to ensure there are no chances of the battery pack making contact.
I hope that clarifies the methodology. It's hard to find documentation on the internet because it's not something the average shop or technician is aware of but it is out there. I have seen it and read it. Generally it's all from motorsports teams.
I can't tell you how many "JDM" or "Taiwanese" type coilovers are installed incorrectly because no shop will be able to convince someone who bought $800 coilovers to spend $1000 to set them up as we would for a motorsports team. It's important to educate consumers on how this design should be properly installed so you don't risk bottoming out your ICE frame rails on the ground or EV battery pack on a Tesla or having other hard components contact each other before the shock bottoms out on itself. At the end of the day you don't want to curb at the track and have your tire smash up into the fender well or have anything contact prior to engaging the bumpstop on the damper. That's the premise of setting up the dampers to limit the vehicle from having an incident of catastrophic failure.