For me and my Ray4, lowering the pickup was not enough. Re-wiring the pickup to parallel completely solved this for me. In my testing, it was the preamp in the bass itself that was clipping and distorting before I re-wired (so outboard solutions won't do any good). Not all Ray4 stock pickups are 4-wire (can be re-wired). IMO, once wired correctly in parallel, the stock pickup and pre is fine . . . sounds like a Ray.
This seems like the most likely thing to me. The pickup is too strong for the onboard preamp. And apparently according to people in this thread it's a known thing and they come that way from the factory? I know it's a cheap bass but that's less than minimum viable product in my mind.