I've tried this with two setups:

#1 Motherboard built-in sound chip + speakers connected directly to the back of the motherboard
#2 USB external sound chip + speakers connected to the USB sound system

Both give me the same clipping problem.

I'm thinking the game doesn't have a built-in mixer, so when too many sound effects co-exist, the later ones overwrite the previous ones, hence cutting previous ones out half-way. I never had this problem even in 25-man raiding back in World of Warcraft, so either FFXIV is too heavy on sound effects, or the game client itself is not processing sound effects properly.

I'd really love to know if there's anyone (on PC) that never had this problem even on populated FATEs like Svara and Odin etc.