Argitoth, OK, taking your scenario where you under-record by a significant amount such as 6 or 10 dB--what I'm saying should be fairly obvious, which is that more bits will help ONLY if those bits aren't filled with noise. Extra bits are of use only when the actual noise floor of the recorder (via the inputs and level settings that you're actually using) is lower than that of the signal. Otherwise the content of those bits will be random and meaningless--no better than having a dithered 16-bit recording.
I did test the M10's dither, by the way. It is definitely adequate; there is no "digital deafness" and no observable quantization distortion as a tone is reduced in level approaching (and then going beneath) the noise floor. The problem was just that when the recorder was set to 24 bits, its noise floor decreased by only a smidgen--about 1 dB as I recall--below its dithered 16-bit level.
BTW Jon S., I keep meaning to note that even the simplest form of dither doesn't need to consume the whole dynamic range of the lowest significant bit. Depending on statistical considerations it can be adequate at 1/3 to 1/2 of that 6 dB figure in terms of effective noise power. So the dynamic range of a properly dithered 16-bit recorder should be a few dB greater than 90.
--best regards
P.S.: I still think that people commonly overestimate--perhaps by as much as 20 or 30 dB--the dynamic range that they actually need for live recording in public venues. As long as you can capture the highest peaks of a performance without overload, and play it back without hearing any noise that the recorder itself has added, then you have enough bits! Having one or two bits more, for level-setting comfort so that you don't have to risk overload, is a plus as well.
But what I'm saying is, for nearly all live recording of musical performances that only brings you to about 14 bits total, even including a "comfort" bit or so. I'm fanatical about quiet recordings, and for years in the 1970s I toted 15 ips open-reel recorders and Dolby A-type studio noise reduction systems to record live concerts. You sure as hell couldn't hear any tape hiss in those recordings even when they were played back good and LOUD. But even a dithered 14-bit PCM recorder has a distinctly lower noise floor. For many years the BBC used 12-bit studio-to-transmitter links (although I believe some pre-emphasis was used, which is almost like having maybe one additional bit), and no one heard noise in their famous live FM concert broadcasts.