Flashing an SBF installs a new firmware image on the phone, overwriting whatever is currently installed. Resetting factory defaults simply resets the current firmware to stock. For example, the current firmware is 1.4.57. If you reset to factory, you are still on that firmware level. If you flash that phone to SBF 1.4.26, then the phone will be downgraded to firmware 1.4.26 from 1.4.57.