@dasdoing I think it's pretty clear what the loudness filter is doing if you just look at the effect in the analysis panel of the Equalizer APO GUI:
View attachment 178445
Basically, when you lower the Windows volume control, the loudness filter applies even more attenuation
in addition to the volume control gain, across much of the frequency range (except low bass).
This is why you are confused by what you're seeing in the peak meter. Your peak meter is showing the
additional attenuation from the loudness filter, not the attenuation from the volume control itself.