On some devices (maybe all?) there will be both a PulseAudio and ALSA volume control. The AGC manages the PulseAudio volume, but if the ALSA volume isn't set to a halfway reasonable range, there's not much it can do.
To fix manually open a terminal and run "alsamixer". Hit F4 to move to capture devices and F6 to select the device in question. Move the slider appropriately. You can tune this in real-time in a loopback call if you want; ideally it would be at a high enough level such that the PulseAudio volume (visible through the "Sound Preferences" Gnome control panel) isn't maxed out.
Ideally, we would be able to control the ALSA volume control as well to avoid cases like this.
We shouldn't see this problem on ChromeOS (which uses ALSA, not PulseAudio) or GVC (which has some kind of volume tuning procedure).