I can see what they mean. When the music gets over modulated and peaked out, then the intended tone gets all wacked. The bass gets all warbly and the drums sound stupid. Beyond that the instruments will start to bleed together and make it difficult to sort them out.
I've never taken a big consideration on how qualitative the sound of a record is with a handful of exceptions. But I have kind of a admitted hypocritical attitude towards the subject, since I prefer the shittier sounding GBV records to the higher-fi ones. But at least I'd say I'd want the record to sound competent.
I don't really know what Metallica was going for. If it really sounds like that just to make it louder then that's just dumb. The new Lightning Bolt record is a brawl of volume and it doesn't have those maxed out mistakes, that I can recall anyway.
So I dunno, it'd be interesting to hear what Metallica has to say about it, what they were thinking when they mixed the record.
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