Used Audio Research Preamp Options

I checked the ARC LS3 owner's manual and found that the Direct/Normal switch acts as described above and bypasses the Balance, Mode and Input Selector switches.
As I recall from when I owned an LS3, there was no great sonic difference using the Direct Mode vs, Normal. This is probably because you are still subjecting the signal to some of the preamp's electronics and therefore this is not a truly passive line stage circuit.
In any case, if you want a preamp vs. a passive line stage, this should not be a deciding factor as to which preamp to purchase.

I had an LS3 and liked it...liked it better than an Audible Illusion 3a and a Conrad Johnson PV (3?) I compared it with.  Nothing romantic on sparkly.  It was feeding a McCormack DNA-1 and just sounded solid, full and balanced. But it's  the only AR I've owned.

I agree with both of the LS17SE owners, which I own also, I had a Dodd buffer with the 6H30 and liked it compared to other tube pre's I owned, less noise great sound stage, reliable and long lasting tubes. I compared it to a Wyred 4 Sound STPSE and liked what it did for the sound better than the almost passive Wyred. Also fully balanced, Great buy right now.

To put this with or without preamp question to bed for myself, I locked myself in the room and tried to do an A/B comparison to hear the difference. I’ll say that my system is probably not as good as or in some cases anywhere as good as what a lot of folks here own so this test technically proves nothing in general and is just one data point. One other thing I should add is that in comparison with all the other criteria, for me the quality of soundstage is really a big deal as a measure of the overall quality of a system. Other folks may have different preferences. When I run my sources - CD player or DAC, directly into the amp, the sound is a little more open and crisper but I sense the midrange, especially female vocals are more forward and have a slight sharp edge. It sounds real nice at first but after a few minutes or an hour it really stands out and is more noticeable. The soundstage, particularly the depth is also not as good but strangely the width is bigger. I lose a bit of that crispness and width with the preamp in but the soundstage seems more recessed. I hear folks say that with passives the interconnect cables play a bigger role in sound quality so there may be other ways to strike a compromise by experimenting with other variables but in my system, adding an (active) preamp can clearly affect how the content is delivered, particularly the musical presentation of the soundstage. All in all, I still prefer the direct connection even though it limits me to using only one source at any given time. Ultimately, I find the wider soundstage and the "crisper" midrange more satisfying mainly because it "fills" the room better and the imaging is a tad sharper in off-axis listening positions.

 You are comparing an NAD C165BEE to no preamp. Go borrow an Audio research preamp from the dealer for the weekend. Then do the same test. That will give you a much better idea of what a top flight preamp will do for your system. I doubt it will be as close.