You're correct, DV, in noting that there are no fixed boundaries in analog disc recording representing 100% modulation. The amplitude of the etched groove is limited by practical factors: disc speed, inner groove diameter, pitch (how close the lines are inscribed) and a thing called "pinch effect," or the ability of the playback stylus to track relatively smaller-diameter inner grooves closer to the label.
If you drive the cutting stylus with too much audio, you can cause a variety of faults including "overcutting" when the stylus swings into and damages adjacent grooves and an annoying effect called "pre-echo." In the latter the etching stylus encounters less resistance from the side of the groove adjacent to previously cut traces, versus the solid (virgin) record material on the uncut side. The greater intertia of the solid remaining portion causes "bouncing" of the cutter deforming the grooves made in immediately prior revolutions, causing a "preview" echo in the program material.
If you drive the cutting stylus with too much audio, you can cause a variety of faults including "overcutting" when the stylus swings into and damages adjacent grooves and an annoying effect called "pre-echo." In the latter the etching stylus encounters less resistance from the side of the groove adjacent to previously cut traces, versus the solid (virgin) record material on the uncut side. The greater intertia of the solid remaining portion causes "bouncing" of the cutter deforming the grooves made in immediately prior revolutions, causing a "preview" echo in the program material.