Let me stress that it is not bugs in the beta or release firmware people are experiencing.
1. the volume caps are mandated by EU, but can be bypassed via developer options, as pointed out before.
2. the flashing headphone icon did not occur in our testing, and still does not. The fault actually lies in a hardware variance between units. The 3.5mm headphone out is capable of responding to headset remotes, but this terminal (the one to be connected to the mic pole on TRRS headsets) on certain units are responding unexpectedly to the new firmware, which would have used signals from that terminal to aid in improving earphone insertion detection accuracy. It would have been worthy of being called a defect for units to be recalled for replacement, if not for the fact that the issue is not uncovered by v.1 firmware, there are other ways to detect headphone detection, and the issue does not affect actual use of inline remotes on headsets with such.
Now that we are aware of this unit variance, we shall source units demonstrating this issue with the new firmware and adapt further new firmware accordingly.