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Software navigation keys have always worked pretty much identical to physical ones, with one exception. Rotating the device would always cause the navigation bar to move to the right side of the screen. This might not seem like a problem, but if you are flipping your phone clockwise, the nav bar essentially jumps from one side of the phone to the other.
Now on Android 7.1, this behavior has been fixed. Rotating the device clockwise moves the nav bar to the left, and counter-clockwise to the right (versus always moving to the right). Here is a demo:
This makes more logical sense than the old behavior, especially when you consider that this is supposed to work exactly like physical buttons.