There a several ways an Android phone can implement USB Audio. Depending on how much of the original framework is reused or replaced, you will get different results and a different impact on volume handling.
Phone manufacturers are to a to a large extent bound to what their chip supplier has decided to do, and may not have access to all hardware directly but be forced to ask the chip supplier for any modifiations, which these might or might not be willing to do in any particular chipset. For the Qualcomm Snapdragon high-performance chipsets which many use for high-end phones, the audio framework runs at 48kHz/16bits.
It is a substantial change to modify all components in that framework to instead run at higher frequencies, particularly if DSP sound processing algorithms have been added - as we have done in Sony Mobile for some years. Therefore, we choose to implement the first release of high-res support on our phones as a bypass of the audio framework directly to USB. Others have instead modified the framework, and therefore will have high-res audio from the internal DAC too. Whether the small amp in these chipsets really is capable of doing justice to high-res sound is another matter; but they at least will be impacted by the limit on volume due to hearing protection regulations, which makes it difficult or impossible to use more expensive, high-impendace headphones.
Anyway, If you turn our high-res audio bypass off, high-res sound will be down-sampled to 48kHz/16bit and passes through the audio framework, be able to use our DSP eftects (such as room virtualization) and go through the mixer with any notifications etc.
In the latter case, you will get volume control from the audio framework, and the data passed through to USB will basically lose some of the least significant bits which will resulti n lower output volume from the DAC. It is probsble that some of the phones which are reported to enable volume control works in this way.
In the former case, when we bypass the audio framework, the principle is to avoid any manipulation of the data, and so we do not perform any volume adjustment in the digital domain. For DAC/amps like the FiiO E17 this is not a problem, since it has a volume control, but for the Dragonfly it is.
Volume control in the DAC can be done either in the digital domain or after D/A conversion in the analog domain. It is a quite contentious issue whether a digital volume control should be used or not. If you do this in a 16-bit space, the some bits will be lost, but depending on the maximum volume of your device and its S/N ratio, some or all of this information might anyway be lost in noise or below the threshold edge of your hearing. Most DAC's use at least 24bits and some even use 32 (or more) bits internally, so in those cases it should not matter as long as the volume control is done properly within the DAC.
The problem comes when a DAC has internal volume control (either digital or analog) but no physical controls. In that case, it relies on USB control signals sent, beside the full original data, to control the volume. This is apparently a part of the USB standard which a PC or Mac has no trouble which, but which generally is not implemented in Android, at least as it comes from Google or as adapted by Qualcomm for their chipsets. In principle it is possible for a manufacturer of for other chip suppliers to add that, but I have no information either way whether this is done or not; given the nature of the subjects, I would however guess that none have done so since a digital volule control in the phone will mostly perform adequately, especially when used on the move with some background noise. In the case of Sony Mobile, I have so far not been able to get this prioritized.