Apple support asked me to take the phone to the Apple store and they said if it cannot be repaired, they will replace it. Lets see. I will update the post after the store visit.
In the mean time please update your iPhone to iOS 10.0.2. The update fixes the following issues:
- Addresses and issue that could prevent headphone audio controls from temporarily not working
- Resolves an issue that caused Photos to quit for some users when turning on iCloud Photo Library
- Fixes and issue that prevented enabling some app extensions.
Update (9/24/2016): Swapped the phone for a new one. Noise is still there.