"Although it does seem a little odd to basically be making a potentially weaker part with what amounts to a 'sheath' "
Absolutely.
The thing is though that a tiny fillet of silver will hold tubes together, not to mention a weld, not to mention that current cast lugs were once spurned and regarded as bad, etc...
As evil as welding is to the lugs crowd, it has to be better on a larger scale. So if you have a 1.125 tube joined by means of a weld in a 1.25 tube installed with life affirming silver or bronze you just know it has to be a step in the right direction, compared to welding that puppy down at the 1.125" tube end. Surely as heinous as welding is to some (though apparently melting and casting the alloy into a lug is just fine), there has to be some joint size that would end up providing enough surface area to mitigate the effects of using state of the art welding techniques? See? Lugs are always making it a better world to live in.