Action is Confused

[Jayxe]

This is a recording sound problem unlike others I've looked at
I am using a Razer Kraken 7.1 USB Headset, and I think this (as in, "USB operated headset") is the culprit

Now for the actual problem...I cannot get my System sounds working.

--Yes, "record system sounds" is checked.
--Yes, the volume slider is even 50/50 on system sounds and microphone recording.
--Yes, I've tried multi-channel and non multi-channel.

My confusion is that when I set my System Sounds recording to my monitor's speakers, it records my voice from my microphone and not the game sounds. Then, when I set System Sounds recording to the Kraken speakers or System Default (which is set to Kraken headset), no sound is recorded - mic or system sounds. Setting the Microphone capture setting to either System Default or Kraken headset does nothing different, and those are the only 2 options.

(Previously, I had a Razer Tiamat 7.1 with a quality sound card for 7.1 sound systems, and Action! recorded everything perfectly fine.)

TL;DR --- Why is my MICROPHONE being interpretted by Action! as my system sounds?

[radi]

Our support team is aware of Razer Kraken issue, they are investigating this problem.

[Jayxe]

Did the Kraken mess up important configurations in Action? Because I've done a system restore along with uninstalling/reinstalling Action, and my previous headset (razer tiamat 7.1) no longer works the same way, and Action is still "confused" on system sounds.

[radi]

Was your previous headset working properly?