what is this distortion?
This is the circuit where it is derived
As you can see, it looks like there is a problem in the negative half cycle, its not really a straight clip. The waveform is taken at the 8 ohm resistor
A couple of observations:
(1) In your schematic, you show Q4 as an n-channel though the part number is for a p-channel.
(2) Also, in your schematic, Q4 appears to be "upside down", i.e., the drain is connected to the output rather than the source.
It is 2nd harmonic distortion caused by asymmetry in the circuit. Its ability to sink current is less than its ability to source current.