On my uv5rc unit the volume control does control the volume of the speaker/mic.  Thus it would also control the amplitude of the radio to computer signal while reading the radio.  I expect that the chip in the cable starts with an adc which would only give a high with adequate volume level.  My cable and radio works at half volume but other combos could need full volume and higher is better.

My canadian nickel's worth (no pennies here).
Fred VA6FRM