The transfer curve changes the audio dynamic. Audio clipping is an extreme dynamic change in the audio signal.
Clipping means that the audio signal, in some way, was cut at its extremes, but I prefer to describe it as “crushed”, because it hasn’t had place or headroom to fully develop.

In the following graphic, you can see two transfer curves and their waveforms. The green curve was clipped in a soft way (soft clipping) and the orange curve is linear (since it has not changed by any process)