By the nature of the effect being an insert the track goes through the effect and then the output of that channel. This then feeds the group track and again an insert on that would be the next to be applied before going to wherever you have it routed. So in series.
I decided that my issue was not having gain-staged properly from plug-in to plug-in. Once I made sure I wasn’t clipping anywhere by managing the output level of each plug-in, the clipping (and distortion) went away.