This is something I've posted before on the subject.
Part of it is from me reverse engineering CGC's grading standards through 1000's of submissions, some of it from conversations with CGC employees and some of it from reading the Overstreet grading guide (2nd edition).
In the grading guide there is a chart and a graph that shows how many defects and what size of defects are allowed in grade.
If you look at the graph, it shows that you are allowed 1 "larger" or 2 "smaller" defects in NM/M grade of 1/16" - 1/8" in size. I took that to mean that you can have two 1/16" or one 1/8" defect on an otherwise perfect book and the book will grade a 9.8.
That would include a miswrap of up to roughly 1/8"
A miswrap larger than 1/8" to 1/4" would drop it to the 9.6 range.
If you look at 9.9, you'll note that only one defect of 1/16" in size is allowed on an otherwise perfect book...so a perfect book with a 1/16" miswrap would drop the book into a 9.9 grade.
A perfect book with no miswrap would not drop the grade.
Thank you Vintage, I remember reading this in one of your post. It was very helpful, but from what I have seen (in my limited experience) there are high graded books (NM/M) that have more than the 1 large and or 2 small defects.