Many people, even people who know better, still think that headroom on individual tracks matters and that you should never see red on your meters.. anywhere. Actually seeing red on meters isn’t clipping.
In Ableton Live, clipping happens in only 3 possible places:
1) At the final master output
2) At sends
3) Some non-native plugins (Which? No idea. Assume it’s all of them.)
Zero dB in a modern DW is nothing special, it has no magic properties different from any other value. It’s just an arbitrary number to the CPU. A signal can be transformed almost arbitrarily inside Live. It’s only when the sound has to be changed form the native floating-point precision to fixed-point precision that clipping becomes a possibility. At this stage the DAW has to figure out how to map from float to fixed. It does so by the convention that some value (that is represented in the UI as 0dB) is mapped to the maximum value in the fixed point data structure. Long story short: everything above that is clipped off, more specifically it’s clamped.
So, for example, lets say all your channels are red. You put a utility plugin in the master channel, right at the start, and set it to reduce the gain by 12 dB. Suddenly the clipping goes away. The only reason this is bad idea is that it makes the signal meters useless as they’re all block red.
The process of mapping form float to fixed (or perhaps from float to clipped float) happens at some point when using sends… not sure where. Sends aren’t that useful nowadays anyway. If you introduce a non-native plugin there’s no easy way of knowing what type of audio that plugin takes from and transmits back to Live, or how it handles audio internally… so for such plugins stick a limiter before them and watch their internal meters too. However, don’t get too carried away with headroom as the plugin might have terrible signal:noise ratios.