I did some research on this issue, and this post is the most relevant information that I have found. However, it does not completely answer my question.
I understand that the GPU's internal LUT and the output signal can have different bit depths. When I change the "Color Depth" setting in CCC, am I changing the bit depth of the internal LUT, or is it changing something else? The reason I am asking is because I am having a banding issue on my Dell UP3216Q monitor. By default, the "Color Depth" setting is 10bpc for my monitor (which is a true 10-bit display). However, very curiously, changing the setting to 6bpc greatly reduces the banding.
I have posted additional details on the Dell support forums: http://en.community.dell.com/support-forums/peripherals/f/3529/t/19666103
Here is a summary of what I am experiencing:
(Prior to calibration) No banding or clipping with monitor at default settings at 6bpc, 8bpc, or 10bpc
Significant banding with regardless of ICC profile with "Color Depth" at either 8bpc or 10bpc (around 50 levels of gray missing out of 256)
Minor banding or clipping with custom ICC profile created by calibration software at 6bpc (around 10 levels of gray missing out of 256)
No banding, but minor clipping at black and white with default sRGB profile at 6bpc (around 10 levels of gray clipped)
Some amount of banding would be expected from a software calibration of the GPU. However, this was a hardware calibration of the monitor, which has a 14-bit internal LUT, so there should be no color loss resulting from banding or clipping at all.
Can someone explain the mechanics of how "Color Depth" works? Clearly, it is not setting the output color depth to 6bpc, because that would mean only 64 levels of gray. I can see 256 levels of gray with the monitor at default settings, and around 245 levels post-calibration with "Color Depth" set to 6bpc. Also, why would a setting of 8bpc or 10bpc cause additional banding? Finally, with the depth set to 6bpc, am I losing colors elsewhere, or is the output signal still 8bpc?