Contrary to common understanding of die-compacted powder metallurgy parts, the strength of soft magnetic composites (SMCs) compacted to very high densities does not increase with rising density. Instead, SMCs exhibit a reduction in transverse rupture strength (TRS) when high green densities are achieved during compaction. This phenomenon has been investigated across six distinct SMC materials, varying in coating systems and particle sizes, alongside pure iron powder. The observed decline in TRS is consistent across all powders studied, primarily due to reduced oxygen penetration during the debinding process and subsequent heat treatment. Notably, powders with smaller particle size distributions demonstrate a more pronounced decrease in TRS at earlier stages. To address this issue, strategies aimed at minimizing the reduction in TRS will be explored and discussed, offering potential solutions for improving the performance of SMCs in practical applications.