That problem also happens with 20 MHz channel width. In addition, while the adapter is stuck at those "Wireless-G legacy B mode speeds" the 5 GHz band also dies (you won't see any AP broadcasting at 5 GHz). So far, Intel doesn't have any drivers that fix this issue. Also, pinging the router is always erratic where you get ping spikes up to 2000 ms intermittently (with packet loss to boot) resulting to slow webpage load times.
Intel is basically slow to get a stable driver for their WiFi. Just need to wait for the 16.7.x.x drivers to come up for the 7260 series and see if it still does this behavior.