To add, played The Legend of Zelda on NES this morning. There were 3 volume levels. 1) Overworld which was very quiet. 2) Dungeon, which was medium. 3) Game Over, which was piercingly loud.
Also, the transitions between these are not instantaneous, but gradual. It’s easier to notice in NES Super Mario. Get one coin and the volume won’t change much. Get about 10 coins and it’ll go up a medium amount. Get 20 coins and the volume is very loud.
Is there some sort of difference in how the sound is handled based on whether it’s a background music or a sound effect? I assume that those labels are mostly for us, not the machine. A sound is a sound to the speakers.