Wrapping your head around the KATD quad analogy is quite a challenge! It's so abstract that it's hard to get a grasp on. I think that's why we keep trying to come up with comparisons to other 4 item systems: fire, air, earth, water; time, space, energy, and mass, etc. I'd highly recommend watching this short series by Melanie Anne Phillips on youtube, where she breaks the KATD quad analogies down in detail. Below is a link to the first video in the series:
With that said, it may be easier to see the differences between preconscious and instinct by applying them to a sample story.
KATD Example Storyform.dr5 (8.3 KB)
So I just spun for a random storyform here complete with gists (and edited one or two), which I'm going to reference throughout the rest of this post.
So in this random storyform, we have a change MC in the physics domain with a concern of obtaining. Let's call her Jenny Noor. She's a seventeen year old roller-blader who's taking the roller hockey world by storm as she chases her dream of winning the Saladin Cup. But then she's offered a huge advertising contract to join the Tel Aviv Tigers, the biggest team in the region (MC problem: help), even though she's pretty critical (MC issue) of the way it's run by the power-hungry Dolores Bell, a wealthy American heiress who transplanted herself and her family to the levant five years prior.
Jenny is over at the Bell's penthouse when the offer is made. She's about to refuse (Story Goal), determined to win the Cup on her own terms with her scrappy hometown team or not at all, when sixteen-year-old Lucas Bell (IC) stumbles into the room. Everything about him, from his pale skin, blond hair, and his strange, yellowish irises captivate Jenny instantly. Dolores admonishes him for intruding; He apologizes for being clumsy, blinking in her direction with his off-putting eyes and she realizes: he's blind. Dolores sends him out of the room, but it's too late. Jenny has already made up her mind to accept the offer, knowing that it's her only chance of seeing that boy again.
SO. Now let's see how the concepts of Instinct and Preconscious appear IN CONTEXT of this particular narrative.
First things first. Instinct is an Issue, and it's going to appear under Understanding in the Physics domain, which we've assigned to our MC. This alone means we're going to consider how instinct looks from a first person, subjective POV. And we know that it's going to be explored pretty soon, because Understanding is Signpost 1 of the MC throughline.
How might this shake out? Well, we know Jenny's a change MC, who's going to wind up spoiling Dolores' plans (OS solution) in the end. But we also know that she's got a personal concern with obtaining. At first she's concerned with nothing other than winning the Cup. But as the story progresses, she becomes increasingly concerned with helping the beautiful, kind-hearted Lucas obtain his freedom from the trap his mother has placed him in. In order do do this, she'll have to convince him that his life could be so much larger than the one he (or his mother) will allow himself to have (IC problem), just has he'll need to convince her to let herself feel vulnerable with him (RS solution), the same way he feels vulnerable while relying on her to guide him through the pulsing, vibrant, dangerous city all around them.
So let's take that first MC signpost of Understanding. This starts from the minute she sees Lucas interacting with his mother and gets a SENSE of how unhealthy their relationship is by how controlling Dolores is of Lucas (IC problem). Jenny tries to wave off her IMPRESSION, telling herself that he's totally fine. Some spoiled rich American kid doesn't need her help. But her INSTINCT tells her otherwise. She remembers her own early childhood with an abusive father who never supported her dreams and sees an echo of her past self in Lucas. She decides to follow him to his fancy charter school the next day, where she sees a vibrant, open-hearted kid who's so different from the one she had seen at the penthouse, and she feels this strange urge to help him escape from under Dolores' thumb for good (MC problem). Deeply unsettled by the impulse, she skates away without speaking to him, avoiding messy attachments just as she's always done (or just as her father's abuse has CONDITIONED her to do).
We could go deeper. That INSTINCTUAL awareness Jenny has towards Lucas when they first meet, what is it made of? Well, nothing other than Knowledge, Ability, Thought and Desire, this time in their purest forms (the original quad). Her instinctual DESIRE to help this poor kid is driven by her own KNOWLEDGE of what abuse feels like and looks like on a bone-deep level, as well as the wrenching THOUGHT that she has the ABILITY to do something about the abuse she's witnessing by taking action. Thus, she accepts the offer being made to her by Dolores, even if she doesn't completely understand WHY. WE as the author/audience do, and that's what counts.
But what about Preconscious? Where does that show up in this same story?
Well, Preconscious is a Concern in the Mind domain, which has been assigned to the OS. So already this tells us a lot. Unlike with Instinct, we're going to be considering Preconscious from an objective, story-wide POV. Therefore, concerns of the Preconscious will affect all of the objective characters, not just our MC. We can also see that it is the third signpost of the OS, so it will not be considered until the second half of the story, long after Instinct has already been dealt with.
So let's examine that OS throughline in Mind. We have a central concern of Subconscious, so we know we're dealing with a bunch of people being driven by their basic drives and desires. In this case, that's lust. Dolores is lusting after power, Jenny is lusting after glory, Lucas is resolutely determined not to lust after anything (IC direction: Conscience), etc. We'd have to make up a few more characters to have a full argument, but you get the idea. All of this lusting is going to lead towards a story goal of "getting rejected by someone." And I anticipate it will be Jenny finally rejecting the offer of help that was originally made by Dolores, choosing to fight with her home team even if it hinders her efforts to get the trophy she's been chasing.
The Preconscious will be the focus of the beginning half of the long second act of the OS, which will end with final signpost of Subconscious. It will take the form of scenes that deal with value, confidence, worry and worth, and which impact all the objective characters in some way or another.
So how might this shake out? Well, let's say by this point that it has become clear that Lucas Bell isn't as weak as everyone thinks he is. Dolores is driven to protect him from the outside world because she believes his blindness makes him fragile. Even Jenny shares this attitude, at least at first. But then through some effort, Lucas begins to recover memories of riding a bicycle as a child, even though he was blind from birth. He knows there are people who would be able to confirm these memories, but for the fact that his mother has inhibited him from meeting anyone outside of school. Why did his mother try to bury these memories in him? And what can he do about it?
Simple: he can get ornery. The longer he stays in the penthouse, the more he becomes like a bird in a cage, snapping at his mother. What is his life WORTH, if he's miserable and alone all the time? He spends his nights (unbeknownst to Dolores) with Jenny (who sneaks in to see him), but the days without her are becoming unbearable. Dolores, WORRIED by this change in her son, amps ups her efforts to keep him safe. However, her CONFIDENCE in her ability to do so gradually wanes. She VALUES her son's objective safety with such intensity that it drives her to behaving in completely inappropriate ways, putting cameras in his room to monitor him without his knowledge. All of this culminates in Lucas discovering the cameras, and (in a knee-jerk reaction) packing a bag and running away from home.
I'm resisting the urge to put these variations in a strict temporal order here, because that's not as important as seeing the way in which this concern of Preconscious is structured by the tug of war between value and worth, worry and confidence. These dynamic pairs determine the "space" occupied by the Preconscious in this story. Which, in turn, determines the "space" or "ability" of the Mind to grapple with the story's central inequity: what to do with a blind boy whom everybody believes to be too weak to survive in the world. What we're seeing here is all of the objective characters being stripped down to their knee-jerk, impulsive responses. We see how much pain each of them can truly tolerate without flinching as they chase after their subconscious desires: Dolores for safety, Jenny for glory, then love, and Lucas for freedom.
Anyway, hope that helps illuminate things a little bit.