> FM has strong noise immunity advantages -- notably AM rejection and the capture effect -- but they don't provide additional sound quality by themselves. That's where the bandwidth helps. An FM channel that is only as wide as an AM channel would sound pretty awful.

Comparing such low-modulation factor FM with traditional AM would be an interesting experiment.

It certainly wouldn't sound good, but I'm not sure it would sound worse than traditional AM at the same SNR. The NFM use-cases I'm familiar with tend to cap audio bandwidth, so they're not fair comparisons.