Noticed this happening when I had a video playing in the background and everytime I broke blocks the sound of the video lowered. This happens to all sound, including the ingame sound but it's harder to notice.

Using 1.12.2 r124

Also, I have "Allow applications to take exclusive control of this device" in my speaker properties off.

Wtf. I never heared of this thing. Can you try other speaker or headphones? Maybe it is a power limitation of your speaker

No, its a limitation of Minecraft. Playing that many break sounds causes everything to sound quieter when doing it. Nothing AA can do about it, sadly.