I haven't downloaded the files yet but what Dan has done makes total sense to me.
Changing the word length / bit depth is easy when you're making it bigger. You just add zeros (not noise or dither). Money analogy: $12.59 can be expressed as 12.59 or 12.590000000000
- nothing destructive going on here
- making it smaller is where the tricks come in (how would you round/truncate this in whole dollars). This will come later.
Dan is combining two sources and probably performing at least one other step like normalization, maybe even some eq. Most audio editors will perform all the calculations at higher bit depths (like 32 fp) and dither back down after each operation.
- as soon as you start doing multiple steps on a value, all of those extra decimal places in the example above could really come in handy but are only available if you're working in a higher bit depth..
Back to the money analogy - it's like doing a bunch of calculations where you had to round to the nearest dollar after each step (16 bit mode). The alternative is to run CEP in 32 bit fp mode, allowing you to keep these longer, more accurate working values while you edit and then do your reduction at the end. This produces a more 'accurate' result.
So if you're in 16 bit mode and you do multiple steps (mixdown, eq, amplitude change) then you're better off doing the whole thing in at a higher bit depth and doing one dither at the end. And in this context, I would think that the 24 bit version could very well sound better when compared to the 16 bit version if all the destructive editing was done at a higher bit depth and dithered down at the end.
Note that this applies to single source recordings as well (not just matrixes). If you are going to perform more than 1 step of destructive processing (including 'normalization') then in theory, operating at a higher bit depth and dithering at the end produces a more mathematically accurate version that has only been subjected to one dither stage instead of one per editing operation.