You're welcome.
But now it gets worse. Reading the LL article, I thought that camera manufacturers were increasing the gain in hardware. Simply scaling the data seems like an even more cheesy solution to the problem (resulting in more noise). Am I misunderstanding?
You're right. What's funny in this case is that Canon's braindamage in other areas of camera design happens to cancel out this particular flaw by the luck of circumstance.
In a camera that is properly designed by knowledgable engineers, scaling the raw data would introduce quantization error (AKA noise, as you said), though only in the deep shadows. Fortunately, this does not happen with Canon cameras, because the designs have flaws introduced by the crack-addled brains of the Marketing Department.
One such coke-inspired flaw is forcing the users to always use 14 bit raw files, when in the very best of cases, no Canon camera has ever yet even take full advantage of 12 bits. Of course, this needlessly bloats file size on compact flash cards and reduces the number of buffered shots. But there is one time when this braindamaged misfeature is useful, and that is to cancel out the mental retardation in other parts of the camera design, such as raw data scaling for angle of incidence response, 1/3 stop ISO, etc.
Now, we'd like to think that at least a hardware gain implementation wouldn't be this bad, right? Unfortunately not. Canon's previous hardware gain implementations, such as in the 1D series, have a variety of problems. It uses a secondary gain amplifier which, in half the 1/3 stop ISO settings, clips a full 1/3 stop of highlight in return for only the slightest decrease in read noise compared to sftware gain (not a good trade in the far majority of circumstances). In the other half of the 1/3 stop settings, the hardware has slightly more read noise compared to software gain.
The simple, cheap, and elegant solution to the problem is metadata gain, the same way that white balance and HTP are metadata gain.
Nikon doesn't make these mistakes. Their brandamage is in entirely different areas, though about the same in magnitude (high black clip, white balance scaling, mismatched LUTs for NEF level thinning, etc.).
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Daniel