I tried looking at the IBR code, but did not find anything on this. The ASME Boiler and Pressure Vessel Code has a good picture and explanation. I forget, but I think it is in the UG section, or maybe an appendix.
The basic rationale is that for the cross-sectional area removed from the shell, there are several other cross-sectional areas in the joint that may be added to compensate. They include surplus thickness of the shell, the nozzle area within 2.5 times the shell thickness, reinforcement pad material within 2 times the nozzle diameter, the area of various weld fillets, and a fifth item I am forgetting.
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