If the flare has been properly made and any phase issues addressed, it actually helps with efficiency. By having it compress against an air load (from the restricting nozzle), the sound pressure can transition better from the transducer to the air. This is especially beneficial with bass.
The veiled sound might be that phase issue I mentioned. Compression horns usually have phase plugs to ensure that all the sound waves are directed out the nozzle and none gets reflected back and cancelling out.
Monoprice Monolith m300, cheapo planar IEM (Headphones)