OK, here is the deal with my post.
I AM NOT saying that over time muscle does not get "conditioned" to impact. I am hoping we all know it does. It is a different mechanism.
Impacts spur increases in bone density. And I do mean "impact". Load bearing exercise e.g. walking/jogging/high impact aerobics are correlated with increases in bone density. This makes a strong case for not telling a 90 pound osteoperotic woman to only do water aerobics. Linked to this, but much less understood, is that blood circulation seems to be a factor as well. Supposedly astronauts lose bone density everywhere EXCEPT their skulls (and the head gets and unusually high amount of circulation in free fall (usually gets called zero gravity, it isn't but that is a different subject). If anyone wants to jump on this as a reason so many asian martial arts use skin irritants, thus increasing circulation, over superficial bones that are being conditioned go ahead.
In the case of "hardening" bone micro-fractures, or for that matter larger fractures, heal in such a way that the bone is stronger than it was prior in resisting the forces that caused the fracture. It is subsequently weaker in other directions because of the same healing process. So, slamming your shins into inanimate objects (or people we are trying to make less animate) does in fact start a process where they will become better weapons. It also in theory makes them more likely to fracture if the force comes in directions other than the usual. The fact there is not an epidemic of kickboxers and karate stylists snapping their tibias when they slip and fall tells us that the trade off is worth it.
Now on to muscle/soft tissue. In general soft tissue does not heal "better" than it was before the injury. Post injury gradual loading/stress is needed in order to re-model the scar tissue/injury.
Essentially, bone heals in a way that it is better prepared to deal with whatever hurt it. Soft tissues tend to heal, and then the stresses placed on them determine what they can handle.
WHAT ABOUT IRON BODY/GETTING HIT
Getting hit in training most likely makes it easier to take shots on muscles because of neurological reasons. On a "pain tolerance" level you get used to it. So it sucks less. The "hardening" is real, but it is more a product of muscle tone. You learn to better tense, and thus protect, the muscle. If it "feels harder", that is because it is "flexed more". The goal of "iron body" training for muscle is neurological improvements. In a dead body the "hard muscles" would not be obvious. The "hardened bones" would be more so. So, you are not going for multiple small "injuries" when conditioning your thighs. Injuring the tissue is counter productive. Getting kicked while training, or specifically using many "lighter" impacts with bamboo swords or a training partner can be done with good result, but it is not doing the same thing as conditioning bones.
NONE OF THIS MEANS THE THAIS ARE DOING IT WRONG.
It may mean that some kickboxers do not know exactly why their training works. I am NOT saying that is the case with anyone in this thread.
PS I am trying to go for a non-nerd explanation here. If anyone wants me to nerd it up, I can.