It is in the end all about the implementation of the DAC chip algorithms. If they are implemented properly, there should not be any issues - I would expect it to be the case with the state of the art DAC chips. And, yes, I also think it is a good thing that both options are provided here.
Here is a small article from a manufacturer (Benchmark) I highly respect, which basically says both methods have the potential to reduce the performance.

OK, I am out of the discussion.
If you are interested, take a look at this. Companies may publish just enough to cover marketing purposes and agendas
https://www.audiosciencereview.com/...hould-i-set-my-dac-to.8956/page-4#post-255104
it will all come down to, whether or not, human can tell the differences. The answer is that, human can not tell. This is another side of the rabbit holes that many people ignores.
So, does it work ? Yes, it does
is it right ? No! But it is close
can we tell the differences ? definitely not! It was engineered with that intentions
it is a can of worms, which I didn’t want to dissect into.
State of the arts or not, it is all about the math, and Full-scales will always be the limits. Informations and bits will have to be traded for one to compromise for another, and they have to be multi bits to adjust. The reason why DSD 1 bit can not be adjusted. So, then again,
is it right ? No! But it is close
The least the original signals are being manipulated, is the closer the end results will be. The end result of having something as close as possible to the original is the ultimate goal of this hobby. The so called “
As the artist intended“ a vast marketing term that flies everywhere. Anyways, that also doesn’t mean analogue signals can not be manipulated either. There are analog tuning, the so called “acoustic tuning”, and there are also “analog equalizer”
In the end, it is all about, whatever float your boat. The rest of the stuff is just “can of worms”.
The real question is, Will the DAP makers give the options to choose ? The answer is that, most of them “Do Not”, but with Ibasso, you have the options