When converting from RAW directly to an sRGB JPG or TIF, some of the original RAW data must be thrown away because it is brighter or darker or more saturated than monitors and printers can reproduce...out-of-gamut for these devices. Using sRGB is fine if you are merely going to create a JPG or make a print from the output of the RAW conversion. But if further tonal manipulations need to be done in Photoshop, such as adjusting Levels or Curves or Saturation or Hue, then the clipped data will limit how much can be done. In this particular example, the blues and greens are clipped on the shadowed end, and the reds are clipped on the highlight end of the histogram.