I have thought about this same thing before.
The torque wrench is calibrated to display an applied force between the attachment point and a given point (beam type).
Add an additional length of leverage between the attachment point and the fastener and the displayed torque value is inaccurate as applied at the fastener.
The torque wrench is showing how much force is being applied at its end, not the end of the additional lever.
How to figure it out? I had an engineer tell me the math formula many years ago, but I remembered it for all of 2 milliseconds.
What I do remember is the displayed torque value was not the applied torque value at the fastener when additional lever was included.
One way to find out would be to take a torque wrench with an extension lever on it and directly couple it to a second torque wrench. mount one of the torque wrenches (t1)in a bench vise, apply a given torque to the other wrench (t2)and observe the value shown on t1 and compare to value on t2.
Now my head hurts