Our ears are far less sensitive to distortion in the bass and lower midrange, where both this speaker and the M105 produce most of their distortion. The M105 in particular is extremely clean in the upper-midrange and treble, where our ears are most sensitive.
Moreover, both speakers have a distortion profile that is dominated by the 2nd harmonic, which (a) needs to get very high in level to exceed auditory masking thresholds and (b) implies relatively good IMD performance.
This M105 distortion graph
looks bad below 500Hz, but note that harmonics 3 and above are all extremely low in level. It's only the 2nd harmonic that is above 0.5% from c. 110Hz up, and even in the bass the 3rd and higher harmonics are well-suppressed.
View attachment 92276
This is from
Zwicker and Fastl (with my own annotation):
View attachment 92290
I didn't have a graph of the same data referenced to 100Hz, nor at precisely 96dB (although 100dB is pretty close), but the trend is for audibility thresholds to actually get
higher as we move down lower in frequency.
Even at 96dB, I would expect the M105's 2nd-harmonic distortion to not be at all objectionable, and possibly not even audible. The M105 is extremely clean where it counts, that is, in the upper-midrange and treble, and at higher harmonics.
(Clearly, at some SPL not too much louder than 96dB, that little woofer is going to pack it in ("bottom out" as Amir says), and then things will start sounding nasty. But it is most certainly not a speaker that is going to have a distorted sonic characteristic at SPLs below the point at which it does that.)
EDIT: in my graph annotation it should say, "At
1000Hz/100dB..."
EDIT 2: fixed