When I plug in the headphones the volume range lowers (i.e., the max volume with headphones is lower than the max volume in the phone speakers). I confirmed this is happening with other apps available from the Daydream App and with different headsets. My device is the Pixel XL.
Is this how it’s suppose to work?
I believe that in general this is how Android works, but I ma not 100% sure.
Yes, this is a built in Android feature. Basically by default there is a “safety limit” on the volume controls. You need to manually override this by cranking the volume in 2D and then, once you’ve done that and accepted the warning message, you’ll get the full dynamic range of the system. Unfortunately this specific UI is not available in VR (yet).