The main goal of audio fidelity is to get as close as possible to the original recorded event. Anything that distances the listener further away from the event reduces fidelity. In the analog world each and every added generation, be it from multi-track to two-track master or master to stamper to pressed LP disc, reduces the final fidelity of a recording. In the digital world, although we have "bit-perfect" transfers from one generation to the next, conversions from the native rate, or from one digital format to another, like generations in analog, does lower a music file's final fidelity. The ultimate example of this would be going from a 192/24 full-resolution file to 128 KBPS MP3.
In the old days we had the term "master tape" which, depending on how they were made, could themselves be two or three generations away from the original recorded multi-track taped event. Companies like Opus 3, whose early recordings were primarily live to two-track, had a sonic advantage because they didn't need mix-downs from multi-track to two-track. The two-track original WAS the master. That got their listeners one generation closer to the musical event.
The purest form of analog recording, direct to disc, where the mixing board feeds a cutting lathe, so instead of tape-to-master, the master is cut directly, sounds so good because it eliminates at least three generations from the analog reproduction chain. The digital equivalent would be a live recording done at 192/24 or DSD that is played back in the native format that it was made in. In both cases there is one big creative problem - no editing or retakes are possible. Obviously if everyone plays their parts perfectly the one-take, no-editing methodology dictated by the process isn't a problem. But for most musicians knowing that there will be no retakes means they will pick the safest way to play a passage, which may not be the most musically adventurous or exciting way. Perhaps this is why many direct-to-disk recordings are not very exhilarating or passionate - the process works against it.
Obviously, your average MP3 music consumer has no idea what a master tape sounds like. But even among audiophiles, far too few audiophiles have heard master tapes. Perhaps that's one of the reasons so many of us go gaga every time we are presented with a new format that gets us closer to the sound of the master tape. Analog enthusiasts have been raving over the new subscription tape series from The Tape Project ever since their first tape was released. Why? Because releasing in the tape format bypasses all the LP-manufacturing steps, which reduce fidelity and distance the listener from the original musical event. It should come as no surprise that the Tape Project releases sound better than the original LPs. The really big surprise would be if any of them sounded worse.
J. Gordon Holt always preferred listening to a 7½ IPS tape over a record if he had a choice. And his reason wasn't because the LPs always sounded bad, but because the tapes were always closer to the original musical event, and getting back to the moment of creation is what high-fidelity is all about.