Microphone does work when making calls on Iphone 7

If the microphones on your iPhone aren't working - Apple Support

It's iPhone 7 so could the first symptom of Auido IC fail. Try to record a voice memo. If it's grayed out, make a backup asap and take the phone to a trusted repair shop that does microsoldering (Apple is not really helpful with this case). You can google more info with "iPhone 7 loop disease".