I go through an example that show how the same song sounds on the "Normal" and "Loud" volume setting respectively:
Video link
Both versions of the song have been pulled directly from Spotify, and have been adjusted to have the same loudness level in the first part (before the mix gets busy) in order to give a valid comparison.
Note that not all songs will have this problem when on the “Loud” setting, but some probably will (as mine did). I suspect that this can be a problem with tracks that have been mastered to around -14 dB LUFS or lower as they can fall victim to Spotify's inbuilt limiter.
We can easily avoid the listening experience from going bad by changing to "Normal”, or even better "Quiet”, in Spotify's settings (as shown for the mac-version at the end of the video).
Background info
As a hobbyist electronic musician, I do all the work on my songs from the first idea to the finished release. Recently I experienced that Spotify made my new release sound like mush. My first thought was that this was a result of my limited skillset at mastering, but I had followed the guidelines that Spotify themselves give, so I was confused as to why this was happening. Then I found out that the Spotify app on my phone had changed it's volume settings after an update. Now there were several options in addition to volume normalization, where the user can opt for "Quiet", "Normal" or "Loud" volume. Mine had set itself to "Loud". I changed it to "Normal" and the sound of my release went back to how it was supposed to sound.
***Some technical details***
The original master-file that got distributed via Distrokid followed Spotify's guidelines (-14 dB integrated LUFS and -1,0 dB true peak) and had no audible distortion or inter-sample peaks when checking Logic Pro X's AURoundTRipAAC-plugin (it also runs a test to see if encoding to streaming formats will create inter-sample peaks/potential distortion).
What Spotify has to say about it's user adjustable loudness feature
From Spotify's FAQ:
1.
Source: https://artists.spotify.com/faq/masteri ... is-it-usedPlayback levels are not adjusted when transcoding tracks. Tracks are delivered to the app with their original volume levels, and positive/negative gain compensation is only applied to a track while it’s playing. This gives users the option to adjust the Loudness Normalization if they want to.
Negative gain is applied to louder masters so the loudness level is at ca - 14 dB LUFS. This process only decreases the volume in comparison to the master; no additional distortion occurs.
Positive gain is applied to softer masters so that the loudness level is at ca - 14 dB LUFS. A limiter is also applied, set to engage at -1 dB (sample values), with a 5 ms attack time and a 100 ms decay time. This will prevent any distortion or clipping from soft but dynamic tracks.
The gain is constant throughout the whole track, and calculated to match our desired output loudness level.
2.
Source: https://artists.spotify.com/faq/masteri ... f-my-musicPremium users can choose between the following volume normalization levels in their app settings:
Loud - equalling ca -11 dB LUFS (+6 dB gain multiplied to ReplayGain)
Normal (default) - equalling ca -14 dB LUFS (+3 dB gain multiplied to ReplayGain)
Quiet - equalling ca - 23 dB LUFS (-5 dB gain multiplied to ReplayGain)
This is to compensate for where playback isn’t loud enough (e.g. in a noisy environment) or dynamic enough (e.g. in a quiet environment).
I have a thing for vocal pads with epic undertones. They creep their way into most of my tracks 
