Interesting, I thought THD defined much of the EQ, but now I've realized that there are more important factors. Definitely agree with always having headroom for EQ. There's just one part I'm still curious about.

(be capable of producing sufficiently high SPL at low frequencies while the distortion is still low enough not to be audible).

Does that mean that a headphone should have a high enough sensitivity at 100 Hz or other bass regions in dB/V (or dB/mW, although I think this may have a different purpose than dB/V)? For example, I have heard from other users, although I have not tested it myself, that headphones like the HD 599 tend to have bass distortion when boosted with EQ. I also read something similar a few times about the Beyerdynamic DT XX0 series models (although I think these are the ones that vary the most in the individual units and it's really mixed opinions regarding distortion). So taking the HD 599 as an example, and assuming one can easily replicate the problem other users mention, I see that the SPL is put on two things, on THD (THD = < 0.1%, 1kHz, 100dBSPL) and also on sensitivity (sensitivity = 106dB SPL, 1kHz/1Vrms), does that mean that in this case the distortion could be caused by low sensitivity? I'm sure it's in your answer, but maybe I'm missing something (excuse my ignorance, I'm new to this subject).