WASAPI loopback input records microphone audio instead of system playback

WASAPI loopback recording does not work correctly in Audacity 4.

Even when I select the WASAPI loopback input, Audacity seems to ignore that selection and records from the device microphone instead.

Expected behavior:
The selected loopback input should record system playback audio.

Actual behavior:
The recording uses the device microphone instead of the selected loopback input.

Cannot reproduce.

Windows 10, WASAPI, Audacity 4 (nightly build).

As you can see from my screenshot, the song playing in the background is being recorded into Audacity.

I have the same problem! Works in Audacity 3.7.9 but not not in 4. I use Host: Windows/WASABI and Record Unit: Speakers (3- Logitech USB H340 (Loopback). (That combination is the only that works in 3.7.9 by the way). I can’t record any external sound with Audacity version 4, not from a site on Firefox, Google Chrome, or even from Windows Media Player. I’m stuck with version 3… Sadly…