I haven't realized this effect. One reason might be overcompensation because both the "ch" in "ich" and in "Nacht" and the distinction between them are hard for many non-native speaker, especially in some combinations. I love the Wunderhorn Lieder with Baker and Geraint Evans, but Evans is bumbling often and even Baker sings at times "Grätschen" instead of "Gretchen", i.e. she misses both the closed "e" and the "ch". I can hardly say, though, when I am bothered by non-perfect pronunciation and when I don't care.
I know from school choir singing that we were always told not to "swallow" the hard consonants at the end (like NachT). I don't remember cases of over-articulation from professional singers that bothered me right away, though. There can be a somewhat strange effect with certain sounds, e.g. "Denn allesss Fleischschsch, esss issssT wie Graaass", because the s/sch sounds "accumulate". But then, this passage is supposed to be a bit scary...
In any case, classical sung German never sounded weird to me, compared to spoken. Whereas it does with French where some syllables are pronounced differently or at all that get swallowed up in speaking. Although I know/understand very little French, classical singing in French sounds strange to me and I am still not too fond of it.
