For a fun ride on this topic, see the old thread.
http://69.41.173.82/forums/showthrea...ghlight=action
My summary:
1. OP claimed that action lower than 1/8" can affect tone/volume, as it can diminish the arc of the vibrating strings. Seems like a plausible hypothesis, but no direct evidence to prove this was provided.
2. MANY others, including experienced luthiers and builders, disagreed, thinking that actions of 6/64" or even lower are possible on well-built guitars without sacrificing volume.
3. Some people got angry.
There does seem to be a general experiential sense that action can affect volume and tone, so probably the best way to find out is by experimenting yourself. I was recently advised on a thread to loosen my truss rod slightly (1/8 turn) to see if it had an impact on my tone, since I was complaining about more pinched sound higher up on the neck.
JD