I installed my Z120 a few months ago. Didn't have any problems at all with the BT, it worked perfectly.
Recently it turned into junk (same phone, nothing different). I disconnected the phone, waited a day or so and paired it up again and it still stinks. I can only hear every 3rd or 4th word and my callers tell me I sound like I am far away.
Will a new mic solve this problem? I am considering selling the radio because of this issue. I will gladly pay more money for something that doesn't look as cool but functions 100% of the time.
Did you try deleting the pairing from the phone and re-pairing? I flash different operating systems on my phone a lot, so I do a lot of re-pairing. Sometimes, for unknown reasons, the quality sucks, or some other issue, and I just keep deleting and pairing until it is good. Also, make sure you have "Echo Cancel" enabled in the BT settings.
Unforunately, you may have to find a unit with better BT phone support. I always tell people in car support groups who are looking to upgrade their HU - if hands-free phone quality is a top priority, look elseware. For many, like me, it isn't important - as long as it works, so I can live with the lame Pioneer quality. I'm like - "I don't wanna be talking on the phone will driving anyhow, so lets keep it short!"