Stereo output muted while using microphone on wireless headphones

I have headphones that have 2 audio inputs, and 1 mic audio output:

They're made by a Chinese company called Bludio.

By default, the headphones are configured as in the above screen shots.

However, when the microphone is used / picks up noise, the STEREO output is muted. I have no idea why, or whether it's a windows/software issue, or something the manufacturer configured in their firmware.

I can combat this by setting the HANDS-FREE as both the communications and Default device (so the stereo is no longer used, and only the hands-free output has a tick).

This works, however for some reason the audio quality is very bad with the hands-free output. Again, I don't know whether this is something fixable in windows, or a firmware issue. I did switch the audio output to my normal wired speakers (Realtek high def…) and the audio quality was still bad. It only returned to normal when I disconnected the headphones. This leads me to believe its a software/driver issue, i.e. the sample rate is being forced way down when the hands-free is in use.

Why do the headphones have outputs split like this, and whys the quality so bad when I want to use the mic? Is it to reduce the bluetooth bandwidth necessary?

Note: My friend got another pair of cheap headphones off of amazon, and he suffers from the exact same issues. So I think it may be to do with cheap hardware used in the headphones.

EDIT: The guys in this post seem to be having the same problem. Like me, they had to either disable the mic so the STEREO output stopped getting muted, or use the bad quality HADNS-FREE output.

However they went into the bluetooth settings on the headphone, and disabled "hands-free telephony" altogether. All this does is completely disable the hands-free portion of the headphone, so the mic can't be used.

Here's another post about the same problem