Naw, it's not at all that nefarious. While yes it is true that the bass is reduced at higher volumes it is not for the reason you suspect. Instead the bass is boosted at lower volumes and that extra boost is leveled off as you turn up the volume until no extra boost is added.A word of caution about the line level converters. The monsoon amp attenuates the bass to keep from blowing the speakers.
Human beings do not have linear response to different audio frequencies as volume is increased from low to high (it's non-linear if you do a frequency sweep at a constant amplitude as well, but that's a different discussion). Back in the dark ages, radios were provided with a separate button or switch labeled loudness that when activated would add some bass boost. The idea was that you would turn it on at lower volumes and turn it off at higher volumes. As time progressed, the circuits got a little smarter and would roll off some (but not all) of the boost as the volume was raised. With the new Digital Signal Processing circuits commonly found these days (the Rock, Jazz, etc. auto-EQ), adaptive loudness has become part of the mix.
To set your stereo up properly, you should turn it up to the maximum level at which you will typically listen to it, then set all the parameters. As you turn down the volume, you should notice that the bass sounds about the same relative to the rest of the audio program as it did at the higher volume.
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