We have one toggle to capture audio, which defaults to capturing both the input (Microphone) and output (Speaker) audio.
To make sure you're still receiving notifications:
When Speaker Capture is on, macOS prevents notifications from appearing. If you want to still receive macOS notifications while having Speaker Capture on, toggle on "Allow notifications when mirroring or sharing the display" from System Settings > Notifications.
To change your audio capture source:
Click on the Rewind Icon in Menu Bar > Settings
Click on the Audio tab
Click on the drop down mention next to Audio capture source and choose one of the following options:
If you use your Mac without headphones, change to "Microphone only"
If you only want to record output audio, change to "Speaker only"
If you wear headphones (bluetooth or wired), keep the default option "Microphone and speaker audio"
What are the limitations of capturing speaker audio?
When capturing the speaker audio, there are several limitations you should be aware of:
Notifications: As mentioned above, when Speaker Capture is on, macOS prevents notifications from appearing. If you want to still receive macOS notifications while having Speaker Capture on, toggle on "Allow notifications when mirroring or sharing the display" from System Settings > Notifications.
Playing certain videos like Netflix, Apple TV, Prime Video, Hulu, or Udemy: when Speaker Capture is on, due to digital rights management (DRM) restrictions, macOS prevents certain video from appearing. If playing back video like this is important to you, we recommend turning off Speaker Capture.
You can also keep your Audio Capture off most of the time and sync your calendar, which will prompt you to record audio for meetings only.
This feature is only available on macOS Ventura (13) or later.