According to my local dealer (back in 2010 when I did a stage 4 on my 09) if I use all SE parts, my warranty would not be affected. Now, I had no issues so I didn't test that advice.
Your dealer basically lied. Perhaps that dealership would have covered it on their own dime when Harley wouldn't, but more likely they just intended to submit a fraudulent warranty claim if something bad happened. The problem with that strategy, other than the fact it is legally fraud and could cause some serious issues for the dealer, is that Harley could at any time insist on them getting prior approval before making the repairs. In that case, a rep would inspect the bike, and if the failure could be construed to be the result of the mods, the rep could refuse the claim. If you had a failure away from home and took the bike to a different dealer, odds are they would have refused to repair it under warranty due to the mods even if Harley didn't get involved.
If someone decides to do mods to a new bike under the factory warranty, they need to be aware of the risk they are assuming. Does this mean that everyone who does mods and has a failure will have to pay for the repairs? No, because of that thing called luck. Harley doesn't require every repair to be approved ahead of time, mostly because it would be cost prohibitive to have that many reps on the road all the time. That's why I always tell people it's their bike and they can do what they want, as long as they know up front they are assuming some risk. That's quite different than what the dealership folks imply when they are trying to sell you a bunch of high priced parts and labor. Buyer Beware, and always question information you receive from anyone trying to sell you something. Anything that isn't in writing and signed by the dealer principle in front of a witness is pretty much useless, btw. He said, she said doesn't work if you have to take them to court.
In case you think I don't know what I'm talking about, I spent several years as a Zone Service Manager with a Big Three automaker back in the day. Part of my job involved administration of warranty and policy, and I had occasion to both deny warranty coverage before the repair, and to charge the warranty claim back to the dealership when caught after the fact.
Jerry