Understanding the axial load transfer mechanism of rock bolts under diverse conditions is essential for optimizing reinforcement in rock structures, advancing our comprehension of rock support, and facilitating the design of robust engineering solutions. This paper reports the outcomes of an extensive experimental investigation, focusing on the axial behavior of protective sheathed rock bolts employed in corrosive environments, assessed through pullout tests. Three distinct testing setups were designed to evaluate comprehensively the performance of these rock bolts in various scenarios. The results indicated that the failure characteristics and axial behaviors of sheathed rock bolts differ significantly from conventional counterparts. The findings revealed two primary failure modes in sheathed rock bolts: bolt rupture and slip at the grout-sheath interface, based on the testing arrangement and encapsulation length. The lack of adhesion and interlocking at the grout-sheath interface prevents shear stress at the bolt-grout interface from reaching its maximum potential strength, resulting in grout damage manifesting as circumferential cracks. This, in turn, initiates crack formation, reducing the system’s bond strength. Additionally, it causes slip at the grout-sheath interface to occur at lower pullout loads. It can be inferred that the inner surface of the plastic sheath lacks the necessary structural integrity to withstand high loads, significantly impacting bond stress distribution and failure modes. The results demonstrate that the protective sheath remains intact up to an axial displacement of 28 mm, irrespective of the testing configuration. Additionally, it was observed that the maximum bond stress at the bolt-grout interface falls within the range of 6–8.7 MPa, which is below the shear strength of the grout. Consequently, achieving failure at the bolt-grout interface is not feasible.