Typically the inputs should not clip when the level is dialed down. Your AudioBox may be faulty. Contact PreSonus Support to troubleshoot further.
Test your guitar on something else to be sure. If you have an "active" pickup in your guitar, then the output signal of your guitar is being amplified already and you may need to use a DI box to bring the signal down.
Test another audio source with your AudioBox. If it has the same problem, then safe to assume it is faulty.