You're supposed to be able to hear yourself a little bit during a voice call. It's a feature called "sidetone". Without that feedback, the call won't "sound right". It would seem like you're talking into a dead hole.
In your case, it seems like that feedback isn't working right. I don't have the APP3 so I can't comment on those. But I agree that my APP2 don't have distortion in the sidetone audio.