Is there an English word/term/phrase for when you are working on something while using it at the same time?

Solution 1:

As suggested, bootstrapping is a good term for building your tools with the tools you've built. Turning it around, using the tools you built is sometimes called dogfooding

Solution 2:

Welcome, Lakesha!

I've heard it called changing the tire while the car is moving and putting the wing back while the plane is flying.

Solution 3:

It sounds like an extension of concurrency which relates to parallel execution. Here you are developing a system concurrently with the system's usage. This isn't precisely what you described, but seems to come close.