<<What you actually did is improve efficiency. >>
Yes, I agree

<<Power was not lost because it
was never produced to begin with.>>

Here I disagree.  Power IS LOST with friction (power is used to OVERCOME friction), vibration and harmonic inbalances(Power is used to correct the inbalance and heavy flywheels use HP to spin), restrictions to airflow (Power is used to bring the air in and get it out).  By ELIMINATING these power LOSES, power INCREASES.

This is called FREE HP...

Robert