I've been comparing samples from my iPhone 7 using the stock camera and ACDSee Camera Pro, and an old LG G3. Same internal scene, same composition (sorry, no images yet). Here's what I noticed, all EXIF info reported by Google Photos:
A. iPhone stock app: f/1.8, ISO 32, shutter 1/50, file size 2.1MB. Some watercolour effect, most noticeable on skin texture and items that were not focussed.
B. ACDSee Camera Pro (Sharpening 25, Clarity 15, JPEG quality - Standard): f/1.8, ISO 25, shutter 1/50, file size 2.6MB. Considerably less watercoloring, but still apparent.
C. ACDSee Camera Pro (RAW, converted to JPG by Google Photos): f/1.8, ISO 50, shutter 1/35, file size 11MB/2.2MB (RAW/JPG). No hint of the watercolour effect, as expected. Note, Google Photos automatically converted this to a JPG file with file size 2.2MB
D. ACDSee Camera Pro (JPG derived automatically from RAW file - NOT a DNG preview): f/1.8, ISO 50, shutter 1/33, file size 2.8MB. ***?! The worst case of the watercolour effect I've seen from an iPhone. It's more like poster paint.
E. LGG3 Stock Camera: f/2.4, ISO 100, shutter 1/30. On par with image B.
I'm beginning to think that one contributing factor to this issue is the wider aperture on the iPhone. As most photographers know, a wider aperture results in a much shallower depth of field.