It's a known issue and here's what Apple recommends to fix it: https://support.apple.com/en-hk/102217

Most of the time(unless you are on a Mac Mini/Studio/Pro), you have much higher quality microphones built in, so in most use cases, you want to hear from your AirPods but be heard from your internal microphone, which means if every time you connect your AirPods and go into the settings and set the default input device as the internal mic, you won't have sound quality degradation on mic activation, and if you use your mic to talk to people or record something, you will have better sound quality too.

Based on this observation, first I tried to create a script or some automation that can do it for me but found out that it can be clunky or needlessly complex.

Here's someone who used this approach to fix this issue: https://www.dermitch.de/post/macos-force-microphone-when-usi...

Anyway, I decided to take the "build your app for that" route and created this app and called it CrystalClear Audio which doesn't involve any technical setup to use. Making it was also not as easy I hoped, I was expecting this to be a half an hour project but ended up filing bug reports with Apple because some API wasn't behaving as expected or mysterious things were happening when using it(like phantom device changes).

After spending that much time with all this, I decided to publish it on Mac AppStore and after too many rejections(all my mistakes) I got it published: https://apps.apple.com/us/app/crystalclear-sound/id669572374...

The app is not free but comes with a free trial. I decided to go with a very cheap subscription model because I suspect further development might be needed as bugs emerge or API behavior changes. I know its a hated business model but IMHO it's better than ads or tracking of any sort to justify the work done. It's not free because supporting a free app is just as hard as supporting a paid one and it's not one time payment because I don't know what would the right price be for supporting an app for years to come and still have people willing to pay for it.

I hope other people find this useful and if you do, you can support by upvoting on Producthunt so even more people can find it sueful: https://www.producthunt.com/posts/crystalclear-sound

PS: the app is also useful for quickly switching between giving the sound out of the laptop speakers and the headphones, I ended up using that quite often.