HDCD CDs and transcoding

[simoncn]

On your first point, the HDCD decoding process looks for HDCD markers in the audio data and makes gain adjustments when it sees these markers. If these markers are not present, no gain adjustments are made and the output audio data sent to the DAC should be identical to the input audio data.

Edit: The above is incorrect. See this post.

I don't have sufficently detailed knowledge of the FLAC and ALAC encoding algorithms to comment on your second point.