In an audio device, maximum output level is a spec that represents the output signal level that results in 3% harmonic distortion in the low frequencies, and 3% intermodulation distortion in the high frequencies. Any signal hotter than this will result in much higher distortion. To make it most effective, MOL is often plotted versus frequency, giving a good representation of what the response of the device will be.
MOL is an especially common spec on tape machines, where it is dependent on the type of tape used, whether pre or de-emphasis is used, etc. Frequently different types of tape are compared using their MOL ratings on a given machine.