Nice flame wars in here. May I participate ?
Accuracy doesn't always mean quality.
If your sound contains bad noises to start with, if you play it with max accuracy you will hear all its shortcomings, i.e. poor quality.
The Amiga audio does a good job filtering these away, which means some kind of distortion, but this is nevertheless good quality. So no, it's not "bad" at all, at least not when playing mods.
Of course excessive clipping damages the sound further but, like any sound change, it may be intentional by the musician.
Oh, by the way... (I couldn't resist)
According to quantum physics, if nobody's around when a tree falls in the forest, it both makes a sound and doesn't make it
(and worse, in fact it won't really have fallen unless someone is there to see it
)