If the LME sinks straight to the bottom without mixing with the water it seems possible to scorch and caramelize (different than maillard reactions). That is what people are usually worried about when they talk about extract twang... Boil gravity may or may not effect hops utilization, a lot of experts are now saying it doesn't effect it. My brewing software still takes it into account, though.First you can't caramelize sugar in a boil. Caramelization requires high heat and low moisture. The browning you see is from Maillard reactions similar to what you see when you bake bread. Adding half the extract at the end of the boil is meant to lessen this. It is an optional step and meant for cosmetic reasons. You will have to adjust your hops additions to account for the different boil gravity.