I didn't have this problem with my S8 but it appeared after I upgraded to Note 8. I went back and exchanged to another Note 8 and the problem still existed. I went back and downgraded back to S8 to find out the problem occurred with my new S8! Okay
Finally, I found this workaround. Before you click 'Join' for a song, make sure your headphone is detached from the phone. Smule will prompt you to plug in your headphone for better experience. Exactly at that point, plug in your headphone and click OK. After that, continue with your recording as usual. Your mic will now work perfect!
The above workaround works on my new S8+. I wish I had tried this on my Note 8 before I returned it.