Did you try with the case on, but made sure not to cover the rear mic?
I had same problem as you with Dallas case. Bad sound quality in the other end when case on, and good quality when case off.
So I went and bought another case from another brand..and same problem, so its not only the Dallas case, seems like its all cases that cover the rear mic.
So I did a lot of research today about covering a mic while talking, i found reports even back to iPhone 4s where users had this problem.
My guess is that this is software related, and unique for iPhone 7 users of iOS 10, something with rear mic and noise cancellation.
Anyway, by knowing above, I again tried my Dallas case on, but this time I made sure not to cover the rear mic (fold the back of case like a triangle) when I initiated a phone call.
Sure enough it worked this time, no complaints from person in other end.
Just luck or not, I will test this more with this case on too see if I get any complaints.
As of now I'm happy again because the Dallas case is really good, light weight and nice to hold.
And... then hope for SW update from Apple so I don't have to care about the position of the back of the case when making a phone call.