OK, Building on this, I logged a ticket with Apple support on the phone.
Very helpful and understanding.
The fact that the car headhunt had been replaced and validated was significant.
All the following refers to iOS 17.2.1 on iPhone Pro 256MB.
She made a Genius appointment for me at my (not so) local Apple Store.
So, full diagnostic on phone. Fine.
Full BlueTooth check. Fine.
Suspect software issue with the cause being in an unidentified setting. Ok.
Great.
What next?
Back up phone.
Full wipe.
Base restore WITHOUT loading my data. So I basically have a virgin phone.
I return to car to test. (There is no way known the Apple staff member will accompany me to the car park, 2 minutes away).
Groundhog day.
Issue identical.
They offer to replace ALL the inner workings of my phone within 1.5 hours.
I ask if we can cut to the chase and just replace the phone.
Back room conversations.
They replace the phone.
Other phone stuff happens.
They are supportive and helpful.
I try to connect with new virgin phone.
My own data not yet loaded.
The Groundhog says hello again.
I update all my data.
Try the car connection again.
It still fails.
FWIW - the immediate tell tale sign, is that when I dial out, the car stereo continues to play. The music doesn't stop. EVERYTIME.
I return to store.
This time the senior tech comes out.
She is very empathetic and helpful.
Offers to continue replacing my phone.
Suggests this is a software issue - which I now agree with, due to this experience and other comments here.
She says these forums are monitored.
Continue posting.
Tells me that Apple doesn't not acknowledge such issues.
They just issue the fix with a software update and release it.
Keep up to date.
Basically, continue to tolerate the situation and stay in touch.
I now consider that this is stuffed.
There is no current solution apart from praying to the great Apple Gods that a software release fixes this.
I am not holding my breath.
I am too deep i the ecosystem to go Android.
My old phone was traded in.
The car dealership is going to swap the phone module i my car under warranty, but I believe this will have no effect. (Porsche have been amazing). I intend to contact a couple of high end car stereo/technology upgrade specialists.
But suspect ROI would be poor.
The good news is that the September iOS and phone upgrade is only 8 months away.
That's my best chance.