Hello Kartikey,
I had the exact same issue as you described. I use Teams a lot for work and have a custom setup (Headphones for Output, Separate Mic for Input).
After around 2 hours of searching, I found a temporary solution! https://techcommunity.microsoft.com/t5/report-an-issue/bluetooth-devices-have-less-audio-options-bad-audio-quality-win/m-p/2831911
Hope that helps.
Best wishes
Jamie