CH does attenuation in a very unique way. Anybody can look it up if one wants to get into the geeky side of things. In a nutshell it bypasses the usual problems that come with the more common stepped resistor way without introducing bigger problems.
When we signed on with CH Precision, the L1 was not yet released. The C1's volume control was already competitive with separates. Just recently while evaluating Marten Parker Trio DEs I set up a system around it using the C1 as DAC and Pre into M1 monos, fed by my now ancient W20 running Conductor 4. Yes the addition of the L1 will improve on using the onboard volume control. In general terms the L1 will provide a quieter base (not bass!) which in turn leads to more subtlety and nuance in quiet passages which again in turn gives greater dynamic contrast from silence on up to crescendos. This of course impacts all types of music but is least impactful on studio recordings which don't have clean and clear noise floors to begin with.
As Elliot says it is an interim step. In my experience it is one that won't be making you rush into taking the next one. Totally livable and good enough for us to make the decision to apply for distributorship.
Here is an ancient clip (2014) of a system playing with the C1 as Preamp. Here it is using ADCs to convert the output of an Einstein phonostage.
By the way the C1.2 is a different animal from the C1 and mine has yet to receive the latest firmware update.