Interesting...well, I probably won't be moving back to PowerAmp for my Nexus 4, as I prefer the folder navigation on Neutron, but it's good to know PowerAmp can be used properly; I find a lot of its effects useful for making my girl's crap car stereo system sound better I do hate muddy bass...
Thanks for taking the time to figure it out
1. That's the Direct Volume Control feature kicking in. It adjusts the system volume such that if you do boosts in the graphic EQ, what it does instead is boost the system volume then apply EQ cut to everything except the boosted band. If you disable DVC in settings, have a flat EQ and push the preamp to max, the sound does not change, either in volume or timbre, the moment the EQ is turned on or off. But Direct Volume Control is a good feature, as long as it works properly (it doesn't on my phone, volume changes are not applied properly) and as long as people don't get paranoid about that pause when the EQ is turned on or off.
2. Glad to be of help ;)