Hi there! I do have an early Sound Blaster 16 with an OPL3 (CT1740).
The volume knob is analogue and part of the headphones amplifier.
It's a variable resistor, a potentiometer (aka pot or poti).
It can either work as a current limiting resistor or as a voltage divider.
The card can be jumper set to bypass the audio amplifier, though.
That will give line level output, essentially.
The software-controlled mixer is still controlling the source volume that comes out of the sound chips (D/A converter, OPL3, CD player, speaker). Or rather, the mixer chip.
I think we can see it as the driver stage that's controlled via software.
In audio applications and radio applications, such a driver feeds the amplifier.
If the driver output is lower than normal, so is the result of the amplifier.
It's like relationship of a CB radio and an linear amp, hi. ;)
Edit: Edited.
"Time, it seems, doesn't flow. For some it's fast, for some it's slow.
In what to one race is no time at all, another race can rise and fall..." - The Minstrel
//My video channel//