Hollis Johnson/Business Insider
Apple confirmed to Business Insider's Steve Kovach that it was aware of the issue and would soon issue a fix earlier this week.
Anecdotally, I tested the update on an iPhone SE with a pair of Lightning EarPods, and things appear to be working as normal. (Though it's worth noting that the initial issue appeared to happen intermittently - some people were able to adjust volume and take calls like normal, others' buttons simply stopped working. If you still see problems, let us know.)
Whatever the case, the bug highlights one of the more annoying bits of listening to audio on a device like the iPhone 7, which, as you've likely heard by now, doesn't include a headphone jack. Having to wait on a software update to make your (wired) headphones work as normal isn't anyone's idea of fun. That said, Apple's response was relatively swift.
In addition to the headphone control patch, Apple says the update fixes an issue that'd cause the Photos app to close when activating your iCloud Photo Library, as well as an issue that "prevented enabling some app extensions."