FWIW from an ATA configuration perspective ....

http://www.dslreports.com/forum/r222...conversations-

http://www.dslreports.com/forum/r224...simultaneously

These references seem to key in on Echo Suppression on the ATA:
Re: Distorted sound when talking simultaneously

I'd say we're probably talking about an issue of perception here. Echo suppression is essentially just a speech gated automatic partial half-duplex. I say partial, because it doesn't fully turn off speech in the opposite direction; it just reduces its level by some 30 dB. This enforced half duplex lasts for some time delay after the speech ends, which coincides with the 1 to 2 seconds of "distortion" that you describe. It's the only voice feature in ATAs that behaves in this manner. Although it just reduces the volume, but not in and of itself distorts it, you may perhaps be perceiving the unexpected reduced volume as distortion. Technically, though, at the lower level, the speech will be more distorted due to lesser sampling accuracy. Now, if your phone has an AGC feature that amplifies the muted speech back to normal levels, it will of course sound more distorted.
Not to say it is this. Just adding more areas of speculation.
DogFace05 in the above quote is a very savvy person.