I have never noticed any distortion from the amp when using AKG K70x series.
I've noticed A LOT of distortion from a lot of recordings, though!
Anyway, the Westones have approx. the same impedance as AKG K70x, and the Matrix has no trouble driving the AKG.......so it must be something else.
The Westones are far more efficient than the K701s so a gain setting of 10 dB makes sense.
When you look at the efficiency of the Westones the M Stage should have any problem driving them.
Just for fun, try a higher gain setting, you should have to turn the volume down to maybe 9 o'clock to use them, but you never know until to try it out.
The M Stage can output a lot of current and a lot of voltage so it should be able to drive almost any headphone.
It also has a low output impedance so should have any trouble with a low impedance or high impedance 'phone.
It can even drive my 2,000 ohm Sennheisers! No, that's not a typo.
YMMV