Yes, Appendix P removes the issue of what SL to use in setting (1b).
Yielding caused by strain can be accommodated by the piping system. In fact, the calculated elastic stress range (from, say, cold to hot) can be as large as two times yield to avoid low cycle fatigue (the 1.25*(Sc+Sh) in B31.3). High cycle fatigue is considered by the cyclic factor f in equations (1a) & (1b). The problem is, the existing state of stress due to force-based loads (gravity & pressure) reduces the amount of strain you can apply before yield occurs. This is that ratcheting term. Essentially, a high sustained load will reduce the available range for safe shakedown. This is the "-SL" term in (1b).
A simple way to look at it is to take the "-SL" term to the other side of the evaluation: SE<SA using the SA of (1b) and you get SE+SL<1.5(Sc+Sh). Appendix P goes on to say that SE+SL is approximated by the state of stress in operation.
The proper application of Appendix P requires more work than the base Code. The base Code checks SL<Sh and SE<SA while Appendix P replaces SE<SA with SE<1.25f((Sc+Sh) and Sope<1.5(Sc+Sh), but you must still check SL<Sh.
Appendix P will not appear in B31.3 - 2014.