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With a narrower DR the image sensor pixels will saturate under lower illumination levels, i.e. will saturate earlier, and information will be lost.
imaging from a photo sensor involves integrating charge with a controlled gain then dump the charge and integrate again over a slow or fast interval. (Integrate, S&H then dump charge)
The concept involves not doing a full reset which is too noisy, but a modulated diode partial reset to speed up integration time by injecting a pulsed current (Miller Theorom), to prevent saturation and improve dynamic range a bit ( or 3 bits per pixel with limited memory, which can be expanded.)