" I should point out that we should not attribute thermal compression to what might also be bad acoustics. Very reflective environments will have similar audible results, in at least as similar as you can type about them. A lot of bad / compressed treble complaints I’ve seen on audiogon were addressed with better room treatments. Was it excess reflection, or better treble/bass balance, or did the improvement in sound quality lead to turning down the knob, therefore reducing tweeter power dissipation? Really hard to say unless we are measuring. I sure could not explain in words how to hear a difference. :)"
Your observation makes total sense to me.
Dynamic contrast can be viewed as a "signal-to-noise-ratio" thing, and to the extent that undesirable/excess reflections raise the effective in-room "noise floor", they reduce the system's dynamic contrast. I suspect this may be more common and/or often of greater audible significance than the short-term thermal compression revealed by those tone-burst tests.
This "signal to noise" ratio thing has implications for the sense of envelopment as well: The further down in level we can still detect the reverberation tails on the recording, the stronger the perception of the recording venue's hall ambience. (This isn't the only thing that matters for "envelopment" to take place, but imo it's one of them.)
The ear/brain system classifies reflections as such based on their spectral content, so imo it makes sense for absorption to be broadband, such that the spectral balance of the reflections is largely preserved (assuming they were spectrally correct to begin with). If the spectral content of the reflections is skewed too much, they are no longer classified by the ear/brain system as "signal", and so they become "noise".
Duke