Is my understanding of the clipping indicator correct? Thx
Your recorded waves should have a some space before they will get into 0 dB. After 0 dB your sound data will be dropped and that causes a clipping.
Rockbox being digital allows going past 0dB in recording Line-In. Why?
You should understand that 0dB in Line-In like "Record my sound and don't touch recorded wave by applying a volume change", not "record my sound at absolute upper limit".