Basically, it's not really possible to get "interpolated" bits, that is, 4.3 bits, 4.35... since a bit is a binary digit. The number of bits indicates how many digits are used to represent the value of a sample at a given time. So for example, 0101 is a 4-digit number, and a 4 bit value. It wouldn't be possible, not just technologically but even mathematically as far as I know to have a 3.5 digit number (though I'm not a mathematician, so any math guys correct me if I'm wrong please).
For that reason, if left raw, switching between different bit settings would create massive volume jumps. So the FB does a bunch of trickery to even out the levels across different bit settings, while trying not to attenuate all the crunchy craziness that the pedal is producing.
So there's no way for changing the bits to be perfectly smooth, however in the FB it's much, much smoother than it would be if done in a simplistic way.
Another thing to consider is that bit crushing is a type of amplitude-based harmonic distortion. New harmonics are being generated by the effect, so as in a plain jane distortion pedal, as you decrease bits (think of this as analogous to turning up the "sustain" or "drive" control in a regular distortion) the volume will increase by its nature. Again the FB is smoothing out these level jumps quite a bit, but it can be the case sometimes that one will be louder than the rest. The volume knob has more than enough travel to compensate here.
This is a good question, so even though I don't at all mind any email questions like this, it's good that this is here because there are probably others who have wondered about it.
And here's some info that the manual
should have, but doesn't yet: 10:30 on the bit depth is probably more like 3 bits. The bits increase from 1 bit at fully counter-clockwise, up to 8 bits at about 3 o'clock, and then straight to 24 bits, which is effectively turning the bit crushing off completely.
