I tried both Mic and Line from Voice Live 3 (VL3) into the Beat Buddy (BB).
The BB doesn’t seem to change the VL3 tone at all, so this is good. When using Mic level from the VL3 the vocals were barely audible in comparison to the drums. When using the Line level from the VL3 the VL3 was louder than the drums, but I was able to adjust the VL3 output so that I could get a good mix.
My conclusion is, you will NOT have audio quality loss when going through the BB, the BB likes a line level signal going in, and you must be able to control the output volume of the device(s) you are sending to the BB in order to get a good mix. So if you only have a single channel amp or powered speaker this will work as long as you can control the output volumes of the device(s) going into the BB.