This issue can be caused by an incorrect USB setting. Follow these steps to fix the issue.
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After plugging in a USB-C device, an Android System notification will pop up. Tap the notification.

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Select Use Device as MIDI”.

If the notification did not show up, enable the “Developer Mode” by following the steps on How to enable Developer Options on the Razer Phone. After enabling “Developer Mode”, follow these steps:
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Go to Settings > System > Developer Options.

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Scroll down until you find the “Media” options. Tap on “Disable USB Audio Routing” and disable this option.

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If the issue persists, perform a hard reset.
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If the above steps did not work, back up your data and perform a factory reset.