The loudness buttons were more to equalize than to affect the dynamic range.
At lower volumes, we perceive mid-range frequencies to be more prominent than at higher volumes. The loudness buttons would add lows and highs and/or lower mids so that the music would "sound better" at lower volumes.
Going back, seemingly forever, home stereos also had a "loudness" button. Many still do. Usually, there's just some equalization involved, so it's not exactly what I'm suggesting.
The loudness buttons were more to equalize than to affect the dynamic range.
At lower volumes, we perceive mid-range frequencies to be more prominent than at higher volumes. The loudness buttons would add lows and highs and/or lower mids so that the music would "sound better" at lower volumes.
https://ehomerecordingstudio.com/fletcher-munson-curve/
Moreover, stereos had this in 1980 and probably a lot earlier.
Going back, seemingly forever, home stereos also had a "loudness" button. Many still do. Usually, there's just some equalization involved, so it's not exactly what I'm suggesting.
Correct, the "loudness" function is a compensation in the lower frequencies in relation with the volume level, most modern DSPs have that.