Thanks for this extremely interesting finding, I would never have found it myself. I've repeated the steps you took and I got exactly the same results.
In my sound settings, I now have both "Speakers" and "Headphones" as playback devices. Both of them play sounds through my rear Line Out. The "Speakers" setting sounds the same as before (with distortion), but the "Headphones" setting does not have any distortion.
This is consistent with the behaviour I've experienced first hand from plugging headphones or speakers directly into the physical front headphone jack, and also what other people report i.e. that there is no distortion when using the front headphone jack. However, in this case, I obviously haven't actually plugged anything into the front jack at all. I can't figure out whether selecting the "Headphones" playback device was ever intended to output sound through the rear Line Out, or whether this is a bug that indicates there are deeper problems with the entire driver framework.
I notice that the "Headphones" tab in the Realtek Audio Console does not have the Impedance Sensing or Amplify Level information. This is probably not a coincidence - it feels like there is some bug with the way that these "features" work.
