I had my DEH-M8200 in my my dash for 16 years and I think I hit the loudness once by mistake and sounded terribly boomy. I also had a 15 band pioneer eq that did the fine adjustments. Now I have the auto eq and a 13 band on top of that.
For a proper use of Loudness, you should turn it on with all other enhancements off or set to flat... then make any additional adjustments. Turning Loudness on after having made other adjustments to your liking, it will sound boomy.
Another issue will be outboard amplifier's gain setting. Most autosound pro's will tell you to set your gain so max clean output from the amplifier is achieved at approximately 75-80% of the HU's volume control. While this should be the volume level at which Loudness suppose to have no effect if properly implemented, the just stated setting of the amplifier gain is not correct for a Loudness ON operation. If you read the web page I linked in my earlier post, you'll realize the dynamic tonal contouring is relative to decibels at your ears. The electronics of your system have no way of knowing what the decibel level is at your ears.
To properly set your amplifier gain, you'd have to do a C-weighted frequency response testing at several HU volume settings to get the setting right (or as close as reasonably achievable). That said, if AEQ setup was properly implemented, it should do its measurement with Loudness enabled. I don't know whether it does or not, but IIRC, the AEQ setup process disables all enhancements... and IMO judging by the results, it also disables Loudness.