I couldn't decide where to throw my vote.
I've rarely if ever experienced singing so loud it drowns out other conversations, but it is almost always distracting. It usually doesn't bother me all that much, though.
I'm not usually to into being sung to like that, except at my favorite sushi bar. They do a whole dim the lights, sing Happy Birthday, and a free (yummy) dessert, and I like that (and they don't make the staff gather around... the server starts singing and the others join in - as they continue attending their tables). The whole clapping and everyone in your face singing is not really my thing.