In this context, lossless refers only to what happens after the data is already digital. Some digital formats apply data compression the reverse of which doesn'

In this context, lossless refers only to what happens after the data is already digital. Some digital formats apply data compression the reverse of which doesn't recover the original bits exactly. Some digital formats (including CD) use no data compression or a form of compression that recreates exactly the same bits. It's similar to the difference between JPEG and PNG. There is a quality parameter when creating a JPEG because the decompressed image will not be exactly the same, but there is no such quality parameter for PNG because PNG will restore the exact value of every pixel.