That chart shows roughly what PCM will do. DSD tackles it differently.
It is short loud bursts that digital has the biggest problem with, staccato's, crescendo's, this is probably why SACD was chosen by audiophiles for classical listening.
Look at this page -
http://www.merging.com/2002/html/pyradsd.htm
The first diagram shows a short loud analog waveform and then how PCM at 48kHz, 96kHz and 192kHz and SACD (DSD) are able to represent said analog wave.
You can see how closely the 1-bit DSD signal is to the analog wave form, far superior to PCM.