Well I personally prefer to hear the cars as they sound and preferrably little more aggressive and raspy to compensate for their loudness (or lack of in sims). I don't like for example how in iracing all the cars sound too clean. Like the audio guy went and took away all the irregularities and small defects from the samples.
And I like to keep my audio levels reasonable because I don't want to get kicked out from my apartment
. So some kind of "faked loudness effect" is fine for me.
I'm not fan of dynamic sounds either as I like to set my sound volume so that it works throughout the rev range. Not so that I can't hear anything at low revs and then go deaf at high revs.
Also if you want to hear how it sounds with earplugs then wear ear plugs
. Should not be difficult with headphones.
Personally I really like the constant squeking and squeeling sounds the cars make. I'd wish they'd make these kind of sounds all the time and had more nuances to them. And not just when you hit a relatively big bump. All those noises are a distraction in the real cars and it should be like that in a sim too I'd imagine (never driven a real race car).