Sat, the first point is that the volume control is a variable resistor which controls the amount of voltage that comes into the pre-amplifier section from the CD player or other output device. At its maximum setting, regardless of what that is numerically, it lets all the voltage through(and lets no voltage through at the minimum setting)for pre-amplification, which typically might be about 12dB, which is 4 times. Whether there's significant distortion at the pre-amplifier stage depends on how high the voltage coming in from the player is at that instant; if the music is very quiet for the moment, the pre-amp may be outputting much less than a volt even with the volume control all the way up above 0 or whatever the numbering happens to be on that unit. If on the other hand the music hits a loud peak and the voltage(multiplied by the 4 times gain)is too high for the pre-amp to output cleanly, then there'll be audible distortion which will carry forward for the succeeding amplifier section(which will in turn multiply the voltage with a gain of around 29dB, which is about 30 times). So 0 or any other number doesn't necessarily constitute a magic dividing line; it depends how high the voltage coming in at that instant is as to whether the pre-amp and possibly the amplifier too will audibly distort(either or both may be unable to cleanly supply the required voltage output).
Of course, as a practical matter, if a receiver is to be calibrated to reference level(very loud)when at 0, then very loud moments in the program material would be unbearably loud and damaging to hearing if set above 0 regardless of whether the pre-amplifier and amplifier sections could handle it cleanly. Too loud and clean is still too loud.
