Just picked up an 05 Legacy (Auto 79K miles) and noticed brake noise not present on my 05 OB.

Seems to happen upon first couple applications of brakes.... especially if done under very gentle, slow braking at low speeds. Also hear it almost every time when slowing backing down the driveway. Again, the brakes are cold and the fluids have "settled" (if there's such a thing).

No noticeable drop in brake performance and the pedal feels firm.

Any ideas as to cause or remedy?

I had something similar happen with my 97' Legacy wagon. It turned out to be the front passenger's side caliper had seized up.

I suspect that you have a caliper on the verge of seizing up. What is happening is that the partially seized piston doesn't move when you first apply the brake pedal. It sticks due to corrosion in the caliper bore, and/or crud on the piston itself. After the momentary lack of movement, it suddenly pops free and clanks against the brake pads, hence the noise you hear, even though braking seems normal.

 

You need to either replace the caliper or take the piston out and clean it up, as well as the bore, and reassemble, if the parts aren't scored and beyond cleanup.

 

Then you need to check the other three and then flush the entire brake system and add new fluid, something that should be done every 4 years at least. Good Luck!

Seized caliper is letting your pads thunk.