https://nothing.community/d/3920-dac-support
So it isn’t a isolated issue, moderators please report it to Nothing Software team.
First I thought it’s an iem problem then after checking with other devices, I came to a conclusion that it’s an issue with Nothing more specific the issue only in the IEM with an inbuilt DAC, while switching to a non DAC cable the Fiio JD1 worked just fine.
Nothing should look into it and fix it ASAP.
People do tell me if there’s a temporary workaround or a solution to this in developer settings.