The Master Volume, generally, is in between the pre-amp and the power amp. The phase inverter, for all practical purposes, operates as part of the power amp as a whole. This is because amps with negative feedback insert that signal into the phase inverter, so the phase inverter tube and the power tubes operate in a state of equilibrium.
Saying the master "Adjusts the amount of power amp distortion" is a bit clunky, yes. It might be more clear if it said something like, "the master volume reduces the signal level going into the power amp circuit. This matches the actual Master Volume of the modeled amps when those amps have a master volume control. If an amp does not have a master volume control, then it reduces the signal level between the preamp circuit and the power amp circuit. Setting it at 10 is no level reduction and matches the non-master volume amp in the real world."
So, in short, you turn an amp up loud and the preamp and the power amp will distort. If you want to quiet the amp down or reduce power amp distortion, you turn down the master volume control. The amp model should behave in the exact same way.
Sometimes I like to think of a master volume as a ratio control for preamp and power amp distortion. When an amp is turned up, everything distorts. When the master volume is at maximum, the power amp will distort when pused by the preamp, and this is the maximum power amp to preamp distortion ratio. as the master is reduced, the ratio will decrease. As very low levels of the master, the preamp can be distorting a whole lot, and the power amp to be clean. I don't know if this will make sense to everyone, but it's how my brain sometimes works.
Another good thing to remember, we matched the knob positions in the amp models. If anyone here has used a Deluxe Reverb you know that after about 4-5, the amp stops getting louder. Once the amp goes past 7-8 it can get pretty ugly. The model behaves the same. Once the drive passes 40% or so, it'll never be a clean amp. Cranking the drive will never give a tight distortion, it'll blow out the power amp. Some think this sounds awesome, some think it sounds ugly. That's totally subjective. But if you are using a model and you want more drive, think of how that model would sound when cranked. Sometimes it sounds a lot better to put a drive pedal in front of an amp than to push an amp to its limits
Oh, and one case where the master volume is different is the Hiwatt. That amp has an additional gain stage between the master volume and the phase inverter. The model matches this trait.
Wow, I just kept writing. Hope you all got through this. Cheers!