Whatever the bug might be, it does not appear to be limited to iOS. Several times over the last few weeks, I've seen this substitution in Messages on the Mac. On my iPhone and iPad the correct character "I" appears for the same message.
But you probably ought to be letting it autocorrect your "it's" to "its"...Looks like Apple increased or changed the way it’s crowd sourced dictionary learns words to it’s own detriment. Overall I like the feature, so long as I can re-teach it the words I want. It should only take one or two times for me to select “it” or “is” to know that it is my speech pattern. Had the same issue with the I [A] issue.
iOS11 is way past embarrassingNot happening on 11.2 beta for what it's worth.
But this is embarrassing.
Siri-is-stupid-gate. I’ve seen auto correct fail to recognize legitimate words too.
Perhaps one day Apple, Microsoft, Google etc. will get out of the 1980's and start spell-checking more than one word at a time so that context is taken into account. Right now, I.T. snot happening.