Audacity can only record from one “device” at a time.
I’ve no idea how the other software you are using works, but if it is creating a “virtual device”, then Audacity should be able to record from as many “channels” (streams) as that device makes available.
Can you suggest something I can use to record myself whilst Audacity records my friends on Discord? I can’t find any thing that’s not 1) expensive or 2) The ‘trial’ locks the ability to export.
If you want to record Discord and mic on separate left and right channels, you could try the more advanced version of Voicemeeter called Banana. Let us know if you figure that out.