Why 'Loud audio quieter' feature not available on iPhone?

Exactly what kind of headphones? Many non-Apple headphones do NOT support that feature.

That feature may not be available with 3rd party headphones.

I don't have any headphones to try this out but if you connect to your headphones wirelessly or wired to your iphone will the switch turn white to indicate Headphone Safety is active? As you are aware a grey switch shows HS is inactive.

That shows that you have it switched off!