Active noise reduction headphones are, in my experience, more conducive to situational awareness than passive earmuffs. ANR headsets tend to be more selective; they usually reduce constant droning noises especially of low frequency, they’re often designed to eliminate the hum of air conditioners, ventilation systems, vacuum cleaners, crowd roar, and aircraft engines. It has been my experience with ANR aviation headsets that I can actually hear the machinery better because it eliminates a lot of the noise of the propeller, and allows you to hear the engine. I suspect I could hear something rattling loose in a table saw, or someone shouting for my attention, better with an ANR headset than passive muffs or plugs.

Earbuds usually don’t isolate well enough to provide real hearing protection, and there’s only so much their ANR can do. I tend to prefer over the ear headphones or muffs anyway.

Music played through buds/headphones can be an issue, but I usually make a judgement call based on what’s going on. Certain tools are too loud for my headphones to protect me from so I put on my OSHA approved ear shoes. Some I turn off audio for so I can pay attention, and when I’m working with someone like 2 men 1 table saw there’s no audio playing. But you bet I’ve got music or a podcast or an audiobook on while I’m sanding and finishing.