Doesn’t compressing and decompressing files also distort them the same as making a copy of a copy of a copy ect. So not only is the size a limiting factor of the quality but also the constant compression and decompression worsening the quality.
Each copy gets worse than the previous which is called generation loss. Example below.
[Generation Loss photos (wiki)]
(https://en.m.wikipedia.org/wiki/Generation_loss)
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