I believe this is one of the 'classic' misconception in Stress analysis of Piping. There can be two answers to this:
1-
The displacement/expansion stress range is a range not actual stress first of all. Actual stress more or less remains equal to yield stress in any case because expansion loads are 'self-limiting'. In order to measure or compare stress values as done in sustained or occasional stresses a criteria is made called 'equivalent elastic stress' which can be several times the yield stress.The equation you mentioned is a result of this criteria.
So in short, Sa-Allowable stress(EES) do exceeds several times of yield stress as per above mentioned criteria in displacement stress range calculations (only) but actual stress rarely/barely exceeds yield stress.
2-
If you meant why Caesar calculated Allowable stress greater than yield stress than here is what I think you did wrong...
As Sa=f(1.25Sc + 0.25Sh).....(1)
which you calculated as 172.4 MPa.
Code has another condition if you look carefully,
which is: if Sh is greater than Sl (Sustained longitudnal stress) or simply SUS stress, than Sh-Sl needs to be added in the right side figure of the equation described above.i.e.
Sa=f(1.25Sc + 0.25Sh + (Sh-Sl)) which equals to...
Sa=f(1.25(Sc+Sh)-Sl)........(2) See the code for this equation.
From your inputs it can be calculated that you have sustained stress Sl equal to 103.5 Mpa at the point of consideration. Check if this true from your analysis?
As per equation-2 above, 138MPa (Sh) is greater than 103.5MPa (Sl) so a term (138-103.5)=34.5 must be added to 172.4MPa. Which becomes (172.4+34.5)206.9MPa, the value of Sa that Caesar calculated for you.
Hope that helps.
Regards,
Salz