Here is a scene, I use final density just for some look, and adjust the the density fractal to use as it's own depth instead of a SSS to show more edges. I added a screenshot showing highlighted area in-case subtly is overlooked. And than there is a morph. In the animation you can plainly see the shapes are clamped down (and in the case of soft bottoms clamped up), and made more dense at their boundaries (probably from being clamped into their denseness)
Notice every-single edge is hard, even on the top. This is how the depth modular acts, it creates depth on Y, but also clamps the clouds like you explained with edge sharpness. Not sure how you aren't seeing/aware of this.
Also, interestingly this example seems to show clouds in the distances are unaffected by depth modulation.
It seems like the only "Soft parts" of the cloud is at the very base where where it's flat and goes from >0 to nearly 0, or it's because it's on the very most out edges with nothing above it (in the density noise).