Hi tito,
welcome to RuneAudio.
Is this normal? Or should the Pi3's audio output be either HDMI or analog but not both?
Yes, there should be only one output active at a time.
After the first startup it can happen that more than one output is active, but after switching outputs once this should be solved.
I have some persistent problems with Wifi in almost all RPi3 OSs that I'll ask about later
The internal wifi is not the best solution to use (relating to performance and range).
Also the used channel can be problematic, older kernels do not support channels above 11.
You can try my latest test image
#4434
Frank