When the Audio Capture is toggled on, it will capture everything that your Mac's Input and Output Mic can hear.
So if you're using your internal speakers (no headphones), then it will capture any nearby sound (audible words) or anything coming from your speakers.

You can also change your audio source from our settings if you only want "Input" or "Output" to be captured.

We designed the dots next to the Rewind icon to easily see if / what Rewind is capturing!