Binarizing a continuous measure is a distinct transformation, not mere information loss.

Evidence

The dichotomous semantic transformation is also extremely common. With the Polity data, by convention this done at around level 7 of the scale. Usually, dichotomous transformations are seen as information loss vis-à-vis continuous ones. Semantic transformations see this quite differently: it is a very different transformation from the linear one. — Gary Goertz, Social Science Concepts and Measurement, 607

Categorization

• DEFINE: Clarifies that a dichotomous cutoff is a qualitatively different semantic move from a linear rescaling, not a degradation of it.
• XREF: Echoes the Polity/democracy-threshold discussions common in comparative-politics measurement literature you’ve tracked.