When Spotify plays the audio, there's small, generally inaudible MP3 artifacts in the output. When you record that audio and re-encode it to a new MP3 file, these artifacts get re-encoded again, as part of the track, plus new artifacts get added.
It's the same as re-encoding a photo to JPEG repeatedly. Every time you save (esp if the quality settings are a little bit different each time, or if a different encoder is used) you get a few more artifacts.
At high enough quality settings though, you can do this many times before the result is noticeable. So I bet the quality from re-encoding a Spotify song once is inaudible to most people, just like you can brighten a JPEG and save it without suddenly seeing lots of rectangles everywhere.
Reminds me of those good ol' days of what.cd interviews ;)
A bad transcode means that during the transcode process, the file has either been converted to a lossy format more than once, or the file has been converted from lossy to lossless. Bad transcodes are prohibited on What.CD.[0]
