There’s a lot to talk about in this question.
Fundamentally it’s important to appreciate that Game Audio (like Film Audio or TV Audio) is not merely a simulation of sound events but an artistic tapestry–a story that you weave as a sound designer about the events, characters, and environments that drive forward what your work is intended to communicate.
If a glass bottle smashing is more important to the character/player/user than an explosion, then you must deliberately mix the bottle smash sound louder than the explosion (e.g. a character’s important piece of memorabilia, the antidote to a poison, or the vaccine to stop the zombies, etc., etc., etc.).
Who are we to tell you that a glass bottle smash must be quieter than an explosion to the final sound experience?
So what is the purpose of the Sound Attenuation Settings?
You have the Inner Radius of the Sound Attenuation, this is an attempt to allow you to approximate the size (and shape) of the Sound Source. The Inner Radius expresses the region at which the Sound Source will NOT Attenuate over Distance.
Then you have the Falloff Distance. This is an attempt to express how sound loses energy due to friction as it travels through a medium. Higher energy sounds will travel farther than lower energy sounds. In nature, this attenuation is NON-LINEAR. Like other energy radii, it’s best expressed as a 1/r style equation. This is why the Natural Falloff Algorithm might be your better bet if you’re intending to express sound energy transmission more literally.
If you give your Bottle Smash and your Explosion the same Attenuation Settings and you give them equal base Volume, then you are generally assigning them equal loudness importance in your design.
If you were to say your bottle smash can be heard up to 36 meters away, it’s a very loud bottle smash. If you’re to say your explosion cannot be heard beyond 36 meters, then you have a quiet explosion.
Of course, all of these numbers are up to you, up to your design, and what you’re trying to convey.