When I plug headphones into the side of my picade audio still comes out of the speakers as well. Depending how far in I plug the headphones the audio from the speakers does decrease somewhat.
My assumption was the speakers would be off with headphones plugged in.
I did run into a problem while hooking the picade audio up during my build. The jack on the picade board wasn't soldered on very well and came completely off the board while plugging the audio cable from the picade to the pi in for the first time.
I was able to reheat all the solder points to the best of my abilities, audio from the speakers is fine so I assume that was a success. The other jack I assume is fine but now I'm wondering...
Is this a known issue or should the speakers be off completely with headphones in?