Another place where 16 bit source material might cause an issue is if you're mixing a number of tracks for the final release. Noise is additive and so the net result is a lowering of the dynamic range to what is the equivalent of a lower bit depth. By recording and editing in 20 or 24 bit when possible you minimize that effect even if you ultimately are releasing in 16. Of course, as has been pointed out, most DV cameras only go up to 16 bit so it's moot but it certainly points to real problem potential if you record in 12 bit mode to allow for 4 tracks in the camera.