The loudness buttons were more to equalize than to affect the dynamic range.

At lower volumes, we perceive mid-range frequencies to be more prominent than at higher volumes. The loudness buttons would add lows and highs and/or lower mids so that the music would "sound better" at lower volumes.

https://ehomerecordingstudio.com/fletcher-munson-curve/

Going back, seemingly forever, home stereos also had a "loudness" button. Many still do. Usually, there's just some equalization involved, so it's not exactly what I'm suggesting.