Basically clipping happens when the signal goes above the maximum value the device can support... Think of it like the music asking for an 11 when the device can only give you a 10. When that happens, you get a ten, and the wave shape gets all screwed up. Which basically means your music sounds like crap.
It is only likely to happen in certain conditions, but it's certainly something that the new version of the mod is not protecting you from.
Sent from my MB855 using xda premium