Upgrading my Razr Maxx HD was a nightmare. Everything started freaking out and yes, bluetooth lost about 50% of it's quality. Not only did playing music start cutting in and out, but phone calls started jumping around. If my bluetooth was on, it would jump over to speaker randomly.
It was REALLY FRUSTRATING!!!
I finally did a factory reset on my phone and it appeared to help quite a bit. I think perhaps several of my apps where not Kit Kat compatible because since I did the reset it's running MUCH better. NOTE: the bluetooth phone calls seem better, but I have not tested the audio streaming yet.
Admittedly, I had alot of apps on my phone and now I have the bare minimum, but boy does it run better and the battery is lasting much longer.