I actually tried multiple things (called applecare, reset phone, turned phone on and off) with no luck and had researched all day long and found nothing about it.
Right before I was about to do a return and replace for my iPhone 7+ through apple, I did exactly what you're suggesting, BUT with one SMALL tweak, and it FIXED the PROBLEM.
Turning off the Phone Noise Cancellation switch ONLY, didn't work for me, I had to to turn on the Hearing Aid Mode switch as well.
ATTENTION!!!! IF YOUR IPHONE SOUNDS MUFFLED OR HURTS YOUR EARS EVEN, DO THE FOLLOWING:
Go to Settings / General / Accessibility / Hearing Devices / - and turn on the Hearing Aid Mode switch, which then turns off the Phone Noise Cancellation switch.
This worked for me! 🙂