It can't be distilled higher than 160 proof and can't be put into a barrel for aging at higher than 125 proof.
It has to be bottled at 80 proof or higher.
Bourbon that you see with sherry or port cask aging is FINISHED in those casks. These bourbons generally spend several years in the legally required new charred oak barrels, and then are finished in refilled port, sherry or whatever barrels for a short time, usually 3-9 months. Angel's Envy is a great example of this - a bourbon that saw years in charred oak barrels that then sees extra time finishing in port casks, giving it its characteristic gobs of round fruit.