Here is the difference:
If you raise/lower the level in the arrangement window (i.e. the objects) you are increasing/decreasing the level BEFORE it hits the mixer and the plugins. The advantage of doing this is that you can smooth out the levels before they hit a compressor... in effect making the compressor not work so hard and also making it less likely to hear the compressor work. If you are wanting to NOT hear a compressor work, then this is the best choice.
If you raise/lower the level in the mixer, you are changing the levels AFTER the plugins. The advantage of doing this is that you can keep the effect of a compressor working but adjust the level of the sound lower/higher while keeping the compressor effect. IF you are WANTING to hear the compressor work, then this is the best choice.
FWIW I always adjust levels in the arrangement window for constant level... then I use the mixer as a simple overall level control. I NEVER use automation. I never want to hear a compressor work... but this is just me.
This makes my projects sound like I didn't use plugins... but it takes a lot of time to hand tweak all of the tracks... sometimes a week for a project just to do levels. The end effect is worth it however (as long as the client has the budget to pay me for my time to do this I do it).
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