nWo logic

If I'm remembering correctly,wasn't the initial hook of the nWo "these guys don't work here"? Surely then,when Hogan turned he effectively quit WCW to join them,with that logic gap later closing when Bischoff turned and everything just blurred and blended into one. Am I right here? If so,how could Hogan,Hall and Nash quickly become champs storyline-wise if they didn't even work for WCW?
They did actually do some retconning and say that Bischoff was working for them the whole time (I think right after the powerbomb was the "official" storyline point where he decided to join them in secret) and that was why outsiders were suddenly able to keep their contracts and get title shots and stuff.  It used to make sense when they were paying attention to it.