No, Turn10 do not record the cars stock and then in the varying stages of tune, the Forza 2 sepcial edition book has a chapeter that deals with the sound and the complexity of getting it right and it touches on getting the mixing balance right. Turn10 do a good job with the engine noises, that's true but it's not because they record the cars tuned, it's just because they do them well. The formula used to alter the engine noises is what will determine how the engine sounds and the range of sounds included in the engine noise.
Turn10 recorded a lot of the engine sounds seperately ie the transmission noise, the induction noise, the exhaust noise, recording all the sounds seperately then putting them together and manipulating each one independantly of the other, when done right gives great results. It allows you to hear the intricacies of the different noises a bit more. That doesn't mean that they record the sounds of the tuned cars, that just means they use a different formula to calculate changes in note and perhaps recorded the origninal sounds in the different way. You say that Forza's noises don't sound computer generated, well how would you know, a computer generated sound can sound more realistic than an actual recording, depending on the quality of the recording. There's nothing to stop a computer from working out changes in note accurately if the formula is done right. But you also have to remember, the more work you put into the sounds, the more resources your taking off the computer.