Ams1117 worked fine on battery, up in smoke with 12v power supply
Running an Arduino board with 12V is almost always too much. With only a few leds the voltage regulator on the Arduino boards gets too hot.

The best voltage is 7.5V. Then the voltage regulator has only little power dissipation and it is just high enough to turn off the USB 5V power.
Or power the Arduino board with a 5V (from a USB charger, or USB power pack) to the USB connector.

Never use a power supply that is not certified. It is a safety risk that can be avoided with a few dollars more.
The cheap power supply can have ripples, but it can for example have noise in the MHz range, or a voltage spike when turned on, or voltage overshoot when more current is required.  There can also be a coupling to the mains as @Majenko wrote. I have had a few of those. Nasty stuff!
Even with a scope, you can not tell if the power supply is really okay.

If you have a unreliable power source or a voltage that is too high, then a DC-DC converter can convert it into a nice steady voltage.
However, you should first get rid of that cheap power supply and buy a good one.