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Why do people prefer to leave plenty of headroom in their mixdown and then rely on a limiter in the mastering chain to induce loudness as opposed to mixing hot? Does it retain clarity AND make the track louder?

There's not really much difference in having your limiter threshold set to 0dB and mixing into it versus having 8dB of headroom and having to pull your threshold down that much. But conserving headroom is nice from a workflow perspective and keeps you from clipping plugins or any bounced out wavs. Think how weird it'd be to have your monitors turned way down but have all your tracks turned up 800dB and clipping wildly all over the place. It's just messy and prevents you from getting a nice view of what's going on in the mix. Much better to mix at the standard analog reference with your monitors turned up. Then you can send signal through plugins or out to hardware at the nominal level, set dynamics plugin thresholds intelligently instead of at arbitrary values, get accurate measurements from vu meters and spectrograms, etc.

Assuming you're not clipping any plugins, there's no real difference in terms of sound quality, but there are workflow benefits that might help you get a better mix.


Edit: I should also add a note about inter-sample peaks and how they can cause clipping even when a meter reads the signal as under. Best to leave yourself some headroom just in case, and also for the reasons outlined above.