You are right about the cutting of signal, but it still over powers it.
"Clipping is a form of waveform distortion that occurs when an amplifier is overdriven, which happens through attempts to increase the voltage or current beyond its maximum power capability. Driving an amplifier into clipping causes it to put out power in excess of its published ratings, which are customarily done with a "clean" sine wave signal just at the onset of clipping. This makes it a sometimes unexpected cause of loudspeaker failure."