It isn't that all the generator's output will be lost.
It is that it can't output enough power to make up for all the losses in the transfer of power from motor to generator, plus the motor is also trying to move the bike forward at the same time as trying to drive the generator.
If you really want to see how well it works, disconnect the battery from everything, then pedal up to speed with the controllers turned off, but connected to each other (so the generator can power the motor).
Turn them on, stop pedalling, hit full throttle, and see how far you go on *only* energy converted from motive power. Depending on efficiency of everything involved, you probably wont go more than a few feet to a few dozen yards.
It's the laws of physics in operation, and lots of people have tried this sort of thing over the last hundred-plus years, with many variations. Some have even tried to market plans for such devices, but they cannot work in a practical fashion, so while they might make a lot of money off of people that do not understand basic highschool physics, they aren't going to make a usable vehicle from it.
Some of the variations include using a windmill-generator to regain power from the wind (a Chinese man was trying to market such a thing to his country recently, and it has been tried many times before), or extra coils on the motor to "pull power" from the magnets as they go by, using a generator on a different wheel to "pull power" from the road as the vehicle goes along it, etc. They all do the same thing, though--use up more power than they can get back, and thus shorten the range of the vehicle if it is battery (or gas-engine/generator) powered, or make it not really work at all if it is supposed to be powered off of the windmill/other-wheel/etc.'s generator.
I would love to see it work, and it is a great exercise in physics to try it, so I wish you well in the endeavor.
