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You are missing the point

HDCD consisted of two parts (plus variations):

1) A really good sounding A/D converter designed by Keith Johnson, who also designed a lot of the Spectral gear. This was really the main advantage of the system for many, many years. It was a long time before the pro equipment people like Apogee and Lavry started making A/D converters that were competetive with the HDCD A/D converter.

2) A compansion (compression/expansion) system that worked perfectly. Compansion has been around for many decades. That's basically what Dolby noise reduction is. DBX used to have a system for LPs that required an expander for proper playback. The advantage of HDCD over older compansion technologies is simply that the tracking can be perfectly performed due to the coded instructions hidden in the LSB of the audio data. Thus there is no "breathing" or "pumping" as found in most compansion systems.

If an HDCD disc is played back without decoding, there is some compression of the dynamic range. This isn't too noticeable on most discs, as they are already compressed to beat the band anyways.

All the stuff about "peak extend" and "low level extension" are just variations on the details of the compansion operation.

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