As you stated, the THX 20 dB peak is the headroom required on top of the 85 dB reference level. According to THX:
https://www.thx.com/blog/questions/what-is-the-reference-level/
- Experience Studio Clarity: THX Certified Receivers reproduce studio Reference Level, 85dB SPL with 20dB of headroom.
Whereas, Dynamic range for music, per Wiki:
https://en.wikipedia.org/wiki/Dynamic_range
Music[edit]
In
music,
dynamic range is the difference between the quietest and loudest volume of an
instrument,
part or piece of music.
[38] In modern recording, this range is often limited through
dynamic range compression, which allows for louder volume, but can make the recording sound less exciting or live.
[39]
The term
dynamic range may be confusing in music because it has two conflicting definitions, particularly in the understanding of the
loudness war phenomenon.
[40][41] Dynamic range may refer to micro-dynamics,
[42][43][44] related to
crest factor,
[45][46] whereas the
European Broadcasting Union, in EBU3342 Loudness Range, defines
dynamic range as the difference between the quietest and loudest volume, a matter of macro-dynamics.
[40][41][47][48][49][50]
The dynamic range of music as normally perceived in a concert hall does not exceed 80 dB, and human speech is normally perceived over a range of about 40 dB.
[28]:4