I found my way here after scratching my head as to why the audio on my BT enabled amplifier setup kept dropping dramatically.
I work in the audio industry and so I fully appreciate what Apple is trying to do with this new feature. Too many people walk around with ear buds or full headphones on with the volume set at a level that over time WILL (not might) cause permanent hearing loss. So I applaud the effort.
That said, the current implementation is NOT ready for mass roll-out. I have dozens of audio devices (again, I work for a major audio brand) that are BlueTooth enabled that are NOT headphones, and many have their own volume control built in. The best way to use such a device is to have the BT source, in this case my iPhone 12, send full volume to the BT receiver, and then let the receiver device scale it with its local volume control. This new feature prevents that from being possible.
Apple needs to push out an update ASAP that allows this feature to be disabled until it can be better refined.
As for suggested improvements...
1) Provide a way to classify a BT device as "headphones" or not. You can even make the safe default that all devices are headphones, but give me a way to go into the BT devices specific settings and set the device type with a "headphone" check box or something, and then use this setting to decide if the headphone hearing protection feature should apply to the source or not. Simple enough.
2) Rather than immediately cutting the volume, provide a couple of notifications that it is going to happen. Like "You have exceeded X minutes over the safe listening level for headphones, your volume will be automatically reduced in 30 minutes" or something like that. Maybe a second warning at the 5 minute mark. This would give the user a chance to know what is happening and either update the settings or make adjustments on their own. However having used my phone as a source for several official events, I know that having the music abruptly drop out is not acceptable.
Again, I appreciate the efforts that are being taken to make people aware of the consequences of their choices. But this one needs some additional refinement.