If you have amplifier with 1% THD+N, that's considered starting of clipping. From that point distortion increases immensly with every extra watt and amplifier passes DC current to the speakers, leading to overheating of the voice coil, rubbing, destruction. Only thing coming out of an amp should be clean AC and nothing else.
If you have clipping up the chain, the amp will amplify the passed DC even more. So it's not a measured figure for audibility as much as indication of equipment safe operating margins so you can do educated system components matching. If manufacturers don't declare the clipping point of 1% on amps just because THD isn't that bad on the ear, they'll be able to state huge amounts of power on very flimsy incompetent amplifiers that will destroy many speakers. And despite regulation they still try to do this, claiming 'musical power', PMPO, hidden 10% THD+N in the fine print etc.