Not sure what you mean by "pre-loading the lever" and I have no experience with TRP brakes.  I do use BB7's on everything I have and had a similar problem with the first set of mechanicals I installed.  I tried to adjust the cable similar to the way you adjust a caliper rim brake and it doesn't work.  You end up with not enough lever travel at the caliper and the pads never contact the rotor with enough force.  I released the cable at the caliper, took the slack out, then tightened the cable adjuster bolt.  I then adjusted the pads as per instructions and all has been good since.  I have been interested in the TRP brakes and would like to know you come out.

I ran some on my Gravel bike. THey worked well for me when set up properly. I think I still have some extra pads for them.

Shimano for the win

I just did some bedding in on the hill in front of our house and it helped slightly, or at least good enough to ride single track and on grass. I can almost lock up the rear wheel...

Hopefully over time it gets even better!

Are you using new housing as well?

My buddy has the Spyres and loves them but is using 105 levers but did note that going with some nice shimano housing improved the feel as well...

From what I have heard the TRPs work best with Shimano. 

would any housing that compresses be suitable for braking?  even low compression seems suspect to me.  I mean how much cable is actually pulled.  I wouldn't seem like a lot of compression is necessary to soften the braking power and it would almost seem to me that the harder you pulled the more the housing would compress.  I'm not a technician so, feel free to ignore me.

The trade off of "compression":

Lots of compression = spongy lever feel, but strong grip on braking surface.  This means the lever will "feel" bad, but probably brake strongly.

Less compression = solid lever feel, but less grip on braking surface.  This means whereas the lever will probably feel great, the braking power will be weaker.

Cable actuated systems need a little compression to deliver braking power.  With rim brakes you would barely slow down using compressionless housing.  Disc brakes, however, are typically powerful enough to overcome some of the downsides of compressionless housing and still deliver braking power.  This trade-off becomes worthwhile, especially on drop bar bikes, because the lever feel is usually spongy compared to the feel of a MTB type lever on a similar system.   

You may find it worthwhile to try normal brake housing and see if the braking power improves.

And now for a completely different theory:
Have you confirmed the brake calipers are "short-pull" for road levers?  They make "long pull" versions (although i think they use a different name......maybe Spyke instead of Spyre) for MTB use.  If you were using long pull calipers with short pull road levers you would get the type of situation you originally described.

Thanks for the post, this makes sense 100%, I did just double check and they are the Spyre SLC short pulls... Since I did buy this bike second hand I'm sure its the right stuff... I feel I should be able to lock up the front wheel and send myself over the bars, similar to how BB7's could do this on the MTB... right?

i think im going to have someone look over it and not say anything, see what they say lol