Good evening.
When you say « through the aux », how do you actually connect your phone as there is no headphone jack on your iPhone 7? With a dongle in the Lightning port OR are you doing it through Bluetooth?
I connect my old iPhone 5s to my car bluetooth all the time and wearing my Apple Watch - so both using my phone’s Bluetooth a the same time - and never had any issue like yours.
The first thing to check is the reliability of whatever cable - if using one - is connected to your iPhone, losing the contact for a split second will send the audio back to your iPhone exactly as you describe.
Do you have another speaker you could connect the same way you do in your car and see if you get the same behavior? If what you think is happening is indeed the issue then you have a hardware problem. That is something that can only be solved with Apple support.