You cannot use UAC2.0 WITH a microphone plugged in. UAC2.0 will only work for headphones/speakers. If you're going to use a mic you're relegated to UAC1.0
I'm having the same issue. I have found that turning the DAC/AMP off and back on fixes it, so you don't have to unplug the cables and reinsert them at least. I hope this is something that gets addressed soon though, otherwise I'm going to return it.