For some reason my microphone detects system sound instead of voice. And I'm not talking about echo. It doesn't pick up my voice at all and the microphone test detects system sound as my voice. I have tried all the basic things including reinstalling sound drivers and checked if it was plugged into the right port. It's not muted either. I know it is a problem with Windows as none of my microphones work with my computer now.
Looks like you made a loop in your audio system, I used to do this intentionally using virtual cable software to route the system audio, like a music or video that I play on my computer, to come out as microphone input. I'm not sure what other 3rd party software you have that might have done that but since you said you already tried reinstalling sound drivers, look for other 3rd party software or drivers in device manager. if you can't find any of them and the problem still exists, you can reset Windows 10 from the settings.