"As far as the penetration goes you say it only penetrates a half an inch or so, then you say it forms a shell over rotting wood, which I'm guessing keeps water from rotting it any futher. If I coat jin or shari and prevent water from getting in, just how does it keep rotting."
This is a very dangerous assumption. You simply CAN'T keep water from getting underneath an area coated in wood hardener, unless you're extremely thorough in carving out rotted or rotting wood and sealing off the remaining wood from moisture for a long period. This is especially true if the deadwood area extends to the soil line. Water will almost always find a way in. A Minwax "shell" over rotting wood can accelerate the process if it's not tended to regularly.
My experience was with a couple of trees--one a very old rose bush with a 10" trunk and an old amur maple--with a hollow core. The rose had extremely soft wood to begin with. It rotted easily at hard pruning points which it was slow to close. I used Wood hardener repeatedly to "preserve" stabilize the wood, which extended into the soil in some areas. It worked, or so it appeared, forming a hard "shell" of stable wood, until one day that shell --which covered a substantial portion of the trunk, simply cracked and imploded. The wood underneath had turned to mush.
Same held true with the amur, but it took longer and I used a combination of LS and hardener. I used straight LS inside the hollow trunk to keep fungus down --Worked for a while, but since I couldn't control moisture entering behind the treated wood from soil level, it eventually rotted out...